From: Paul Cockshott (wpc@dcs.gla.ac.uk)
Date: Tue Mar 18 2008 - 11:48:34 EDT
One has to deal with the liquidity situation as well. The average rate of profit disguises this. Paul Cockshott Dept of Computing Science University of Glasgow +44 141 330 1629 www.dcs.gla.ac.uk/~wpc/reports/ -----Original Message----- From: ope-bounces@lists.csuchico.edu on behalf of Dave Zachariah Sent: Tue 3/18/2008 1:01 PM To: Outline on Political Economy mailing list Subject: Re: [OPE] estimating the severity and duration of a capitalisteconomic crisis Jerry Levy wrote: > How *from a Marxian perspective* can one empirically estimate the > *range* for the length (in months) and severity (using various units of measurement) of a capitalist economic crisis? What are *from a Marxian perspective* the most important variables that one should look at? What assumptions should be made in the specification of the model? How would such a model differ from a "standard" forecasting model? > > Of course, if anyone on the list wants to make these questions less abstract by focusing on the current contraction, you are more than welcome to do so. There are many millions of workers globally now who would like to know answers to these questions and they shouldn't rely only on mainstream economists for answers. > Part of the answers depend on what one considers to be a crisis. Clearly, a 10% unemployment rate is a crisis for the working class but the firms and rentiers may be doing fine. The severity of a crisis could be measured by the fraction of capital (e.g. of the total fixed capital) making a loss. Thus the evolution of the distribution of profit rates ought to be one good indicator of the state of the economy. Starting with the assumptions of the labour theory of value one can show that the long-run movements of this distribution is ultimately constrained by population growth, productivity growth and the fraction of profits reinvested. Moreover, a monetary system, which enables the operations of a capitalist economy in the first place, depends on the creation of credit and debt. Therefore the inability to pay debts should be another indicator. //Dave Z _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope
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