Class-crossing wealth circulation, profit rate and monetary remedy — an ideological experiment about capitalism system

Yang, Jinrui (2020): Class-crossing wealth circulation, profit rate and monetary remedy — an ideological experiment about capitalism system.

Abstract

Abstract This paper, assuming the class-crossing wealth circulation in a capitalism economy can process in order, focuses on the influence of the wealth circulation speed on the profit rate in the capitalism system. Taking no account of the influence of the profit rate on the investment incentive or the money needed due to the economic growth, this paper finds, for preserving a desired profit rate the money quantity in the system should be larger when the circulation slows down. If the economic growth rate is positive, a slow wealth circulation will lead to a low equilibrium profit rate. Then for preserving the desired profit rate a large quantity of the increased money per unit time from outside is needed. In the transition period from a fast circulation to a slow circulation, the total money quantity also should jump upward to offset the money short before. If there is no economic growth, in the equilibrium state no increased money is needed, but in the transition period the total money quantity should be increased for preserving the profit rate unchanged. This paper also finds, the increased money per unit time needed for preserving the profit rate increases with the economic growth rate when it is very low but decreases with it when it is large, however the total money needed always decreases with the economic growth rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: wealth circulation, profit rate, capitalist household, wealth, total money, increased money
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy

References

Yang, Jinrui. Growth, money and unemployment, inflation - a post-Keynesian model with profit rate. Working paper, School of applied economics, Renmin University of China, 2019.