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Title:Comparative growth dynamics in a discrete-time Marxian circuit of capital model PDF Logo
Authors:Basu, Deepankar
Issue Date:2011
Series/Report no.:Working Paper, University of Massachusetts, Department of Economics 2011-12
Abstract:This paper develops a discrete-time formalization of the circuit of capital model presented by Marx in Volume II of Capital Marx (1993) as a tool for aggregate economic analysis of capitalist economies. The discrete-time formalization closely follows and extends the continuous-time formalization in Foley (1982, 1986a). The discrete-time model is used to address two important issues of interest to the heterodox economic tradition: profit-led versus wage-led growth, and the growth-reducing impact of non- production credit. First, it is demonstrated that both profit-led and wage-led growth regimes can be accommodated within the Marxian circuit of capital model. Second, it is demonstrated that the steady-state growth rate of a capitalist economy is negatively related to the share of consumption credit in total net credit, when the total credit is large to begin with.
Subjects:circuit of capital
economic growth
consumption credit
Marxian political economy
JEL:B51
O1
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, University of Massachusetts

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