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An econometric model of the circuit of capital. (English) Zbl 1058.91561

Summary: The circuit of value outlined in the second volume of Marx’s Capital provides a coherent framework for the characterization of macroeconomic phenomena from a classical perspective. This paper builds on D. K. Foley’s [J. Econ. Theory 28, 300–319 (1982; Zbl 0501.90020)] formal reconstruction of the circuit to derive estimable forms for its three critical mechanisms: the production, realization and recommittal lags. The entire model is then estimated for the United States over the period 1948-89 on the basis of the A. Shaikh and A. Tonak [Measuring the Wealth of Nations: The Political Economy of National Accounts, Cambridge University Press, New York (1995)] data set, and the results are used to explore a number of current controversies, including (on the basis of simulation exercises) the consequence of various deficit reduction proposals.

MSC:

91B64 Macroeconomic theory (monetary models, models of taxation)
91B28 Finance etc. (MSC2000)
91B40 Labor market, contracts (MSC2010)

Citations:

Zbl 0501.90020

Software:

SHAZAM
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