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Class Struggle and Economic Flactuations: VAR Analysis of the post-War U.S. Economy

Author

Listed:
  • Deepankar Basu

    () (Universty of Massachusetts)

  • Ying Chen

    () (University of Massachusetts-Amherst)

  • Jong-seok Oh

    () (University of Massachusetts-Amherst)

Abstract

Building on Marx’s insights in Chapter 25, Volume I of Capital, an augmented version of the cyclical profit squeeze (CPS) theory offers a plausible explanation of macroeconomic fluctuations under capitalism. The pattern of dynamic interactions that emerges from a 3-variable (profit share, unemployment rate and nonresidential fixed investment) vector autoregression estimated with quarterly data for the postwar U.S. economy is consistent with the CPS theory for the regulated (1949Q1–1975Q1) as well as for the neoliberal periods (starting in 1980 or in 1985). Hence, the CPS mechanism seems to be in operation even under neoliberalism. JEL Categories: B51; C22

Suggested Citation

  • Deepankar Basu & Ying Chen & Jong-seok Oh, 2012. "Class Struggle and Economic Flactuations: VAR Analysis of the post-War U.S. Economy," UMASS Amherst Economics Working Papers 2012-02, University of Massachusetts Amherst, Department of Economics.
  • Handle: RePEc:ums:papers:2012-02
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    File URL: http://www.umass.edu/economics/publications/2012-02.pdf
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    References listed on IDEAS

    as
    1. Dumenil, Gerard & Levy, Dominique, 2003. "Technology and distribution: historical trajectories a la Marx," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 201-233, October.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Marx was right
      by chris dillow in Stumbling and Mumbling on 2012-03-20 19:15:21
    2. When newer isn't better
      by chris in Stumbling and Mumbling on 2016-09-08 18:43:26

    More about this item

    Keywords

    cyclical profit squeeze; vector autoregression;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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