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Incomes from Capital in Alternative Economic Theories

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  • Fratini, Saverio M.

    (Roma Tre University)

Abstract

This paper addresses the theoretical explanation of profit and interest within three different approaches: i) classical/Marxian; ii) marginalist; and iii) Arrow-Debreu. In the classical/Marxian approach, incomes from capital are understood as a surplus whose amount depends on the class conflict. In the marginalist theory, the rate of interest is the price firms pay to households for the use of a factor of production named ‘capi-tal’. In the Arrow-Debreu equilibrium theory, interest rates and firm profit are still present, but, as we shall try to show, they can hardly be seen as income from capital.

Suggested Citation

  • Fratini, Saverio M., 2020. "Incomes from Capital in Alternative Economic Theories," Centro Sraffa Working Papers CSWP42, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0042
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    Cited by:

    1. Zolea, Riccardo, 2021. "The relation between interest rate and profit rate: the role of bank profitability in an endogenous money framework," MPRA Paper 108973, University Library of Munich, Germany.
    2. Saverio M. Fratini, 2020. "Interest, profit and saving in Arrow-Debreu equilibrium models," Bulletin of Political Economy, Bulletin of Political Economy, vol. 14(1), pages 39-53, June.
    3. Zolea, Riccardo, 2022. "A Model of the Relationship between the Interest Rate and the Profit Rate," Centro Sraffa Working Papers CSWP55, Centro di Ricerche e Documentazione "Piero Sraffa".

    More about this item

    Keywords

    Capital profit; interest.;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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