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What's Behind the Recent Rise in Profitability?

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  • Edward N. Wolff

    (New York Univ & Jerome Levy Econ Inst)

Abstract

Profitability in the United States has been rising since the early 1980s and by 1997 was at its highest level since its postwar peak in the mid 1960s, and the profit share, by one definition, was at its highest point. In this paper I examine the role of the change in the profit share and capital intensity, as well as structural change, on movements in the rate of profit between 1947 and 1997. Its recent recovery is traced to a rise in the profit share in national income, a slowdown in capital-labor growth on the industry level, and employment shifts to relatively labor-intensive industries.

Suggested Citation

  • Edward N. Wolff, 2000. "What's Behind the Recent Rise in Profitability?," Macroeconomics 0004044, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0004044
    Note: Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 37; figures: included
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    References listed on IDEAS

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    1. Weisskopf, Thomas E, 1979. "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy," Cambridge Journal of Economics, Oxford University Press, vol. 3(4), pages 341-378, December.
    2. Samuelson, Paul, 2012. "Understanding the Marxian Notion of Exploitation: A Summary of the So-CalledTransformation Problem Between Marxian Values and Competitive Prices," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 182-202, August.
    3. Frank Thompson, 1995. "Technical Change, Accumulation and the Rate of Profit," Review of Radical Political Economics, Union for Radical Political Economics, vol. 27(1), pages 97-126, March.
    4. Shaikh,Anwar M. & Tonak,E. Ahmet, 1997. "Measuring the Wealth of Nations," Cambridge Books, Cambridge University Press, number 9780521564793, May.
    5. David Laibman, 1996. "Technical Change, Accumulation and the Rate of Profit Revisited," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(2), pages 33-53, June.
    6. Roemer, John E., 1977. "Technical change and the "tendency of the rate of profit to fall"," Journal of Economic Theory, Elsevier, vol. 16(2), pages 403-424, December.
    7. Dumenil, G & Glick, Mark & Rangel, J, 1987. "The Rate of Profit in the United States," Cambridge Journal of Economics, Oxford University Press, vol. 11(4), pages 331-359, December.
    8. Thomas R. Michl, 1988. "The Two-Stage Decline in U.S. Nonfinancial Corporate Profitability, 1948-1986," Review of Radical Political Economics, Union for Radical Political Economics, vol. 20(4), pages 1-22, December.
    9. Poterba, James M., 1998. "The rate of return to corporate capital and factor shares: new estimates using revised national income accounts and capital stock data," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 48(1), pages 211-246, June.
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    Cited by:

    1. Jamee K. Moudud & Ajit Zacharias, "undated". "Whither the Welfare State? The Macroeconomics of Social Policy," Economics Public Policy Brief Archive ppb_61, Levy Economics Institute.

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    JEL classification:

    • E - Macroeconomics and Monetary Economics

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