What Marx Means Today
18 Pages Posted: 10 Jun 2017
Date Written: May 22, 2017
Marx made significant contributions to macroeconomics, laying the grounds for both Keynes’s theory of aggregate demand and Schumpeter’s theory of creative destruction. His law of the tendency of the rate of profit to fall parallels Alvin Hansen’s theory of secular stagnation which has recently received much attention among scholars studying the financial crises in Japan, the US and the Eurozone. This article argues that part of the new stagnation does not result from a natural exhaustion of investment possibilities, but from an overly loose central bank monetary policy that keeps zombie banks and their zombie clients alive and blocks the emergence of new start-up firms.
Keywords: creative destruction, falling rate of profit, secular stagnation
JEL Classification: B140, B510, E110, E320, E520
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