Reconsidering the Investment-Profit Nexus in Finance-Led Economies: An ARDL-Based Approach

34 Pages Posted: 9 Jun 2008

See all articles by Till van Treeck

Till van Treeck

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK)

Abstract

A Post-Keynesian growth model is developed, in which financial variables are explicitly taken into account. Variants of an investment function are estimated econometrically, applying the ARDL (auto-regressive distributed lag)-based approach proposed by Pesaran etal. (Journal of Applied Econometrics, Vol. 16, No. 3, pp. 289-326). The econometric results are discussed with respect to a remarkable phenomenon that can be observed for some important OECD countries since the early 1980s: accumulation has generally been declining while profit shares and rates have shown a tendency to rise. We concentrate on one potential explanation of this phenomenon, which is particularly relevant for the USA and relies on a high propensity to consume out of capital income.

Suggested Citation

van Treeck, Till, Reconsidering the Investment-Profit Nexus in Finance-Led Economies: An ARDL-Based Approach. Metroeconomica, Vol. 59, Issue 3, pp. 371-404, July 2008, Available at SSRN: https://ssrn.com/abstract=1142052 or http://dx.doi.org/10.1111/j.1467-999X.2008.00312.x

Till Van Treeck (Contact Author)

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK) ( email )

Hans-Böckler-Straße 39
40476 Düsseldorf
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
534
PlumX Metrics