Going out of the Great Recession? Contrast between the United States and Europe: Proposed work from economic history, 1960–2014

Manera, Carles; Navinés, Ferran; Franconetti, Javier

doi:10.1080/01603477.2018.1431794

Cited by 3 publications

(1 citation statement)

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“…Another empirical regularity observed in developed economies is the decreasing trend of the profit rate over the last sixty years. Recent works, such as Basu et al (2022), Manera et al (2019bManera et al ( , 2022, and Lapavitsas (2013), assert that this decrease in the profit rate is mainly explained by the fall of the output-capital ratio (GDP/K), which we will refer to as capital productivity (Manera et al 2019a;Manera et al 2022b). However, which has been the leading cause of the decrease in capital productivity?…”

Section: Introductionmentioning

confidence: 98%

Critical globalisation: Productive capacity and capital productivity in the United States, 1945–2020

Pérez-Montiel,

Manera,

Navinés

et al. 2023

Econ. labour relat. rev.

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We study the dynamics of the profit rate of United States (US) non-financial resident firms between 1945 and 2020. The 1970s entailed the abandonment of industrial policy and the liberalisation and globalisation of markets. This left the US-resident productive sector at the mercy of an unstoppable growth of imports. These imports helped to contain inflation but cornered the US domestic market, which negatively affected the profit rate of non-financial resident firms. The increasing foreign competition forced US-resident firms to invest and increase their productive capacity. Such increasing productive capacity demanded higher market shares; however, US-resident firms continued to lose domestic and foreign markets. This explains the fall in the degree of productive capacity utilisation, capital productivity, and ultimately, the rate of profit since the 1980s.

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