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Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
Next message: Gil Skillman: "[OPE-L:3946] Re: Frank Thompson's Theorem"
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Previous message: andrew kliman: "[OPE-L:3944] Frank Thompson's Theorem"
As I noted in an earlier post, Frank Thompson presented a paper, "The
Composition of Capital and the Rate of Profit: A Reply to Laibman," at the
ASSA conference in New Orleans. In addition to showing that simultaneism
implies that a rise in the value composition of capital will tend to RAISE the
equilibrium rate of profit (given profit-maximization, viable technical
change, and a direct relation between labor demand and the real wage), he uses
BEA data to show that there's no upward trend in the aggregate physical
capital/output ratio in the U.S, which tends to support the point that John's
been making.
Frank looks at 6 measures of the capital/output ratio. All have GDP as their
denominator. The numerators are (1) Gross Fixed Private Nonresidential
Capital, (2) GFPNC + Gross Government-owned Fixed Capital, (3) Gross Total
Fixed Reproducible Tangible Wealth, and (4), (5), and (6) are the same as (1),
(2), and (3), respectively, except that net figures are used instead of gross
figures. Note that (3) is the sum of (2) plus gross fixed private residential
capital plus gross durable goods owned by consumers.
During the period 1929-1994, the average annual percentage changes in these
ratios are -0.32, -0.23, -0.24, 0.01, -0.12, and -0.12.
There is a sharp downward fall in all of them from the early 1930s to the
mid-1940s, having to do with the rise in capacity utilization, and so Frank
also computed the annual percentage changes for the period 1950-1994: 0.49,
0.09, 0.07, 0.61, 0.12, and 0.11, so there is a slight rise, but the plots of
the data look basically flat.
Finally, for the period 1982-1994, the average annual percentage changes
-1.28, -1.42, -0.93, -1.74, -1.78, and -1.23.
Taking the evidence as a whole, my reaction is that the aggregate
capital/output ratio is very stable except for the Depression years,
essentially constant.
Andrew Kliman