Class Struggle and Economic Flactuations: VAR Analysis of the post-War U.S. Economy

Authors

Deepankar Basu, Universty of MassachusettsFollow
Ying Chen, University of Massachusetts-AmherstFollow
Jong-seok Oh, University of Massachusetts-AmherstFollow

Working Paper Number

2012-02

Publication Date

2012

Abstract

Building on Marx’s insights in Chapter 25, Volume I of Capital, an augmented version of the cyclical profit squeeze (CPS) theory offers a plausible explanation of macroeconomic fluctuations under capitalism. The pattern of dynamic interactions that emerges from a 3-variable (profit share, unemployment rate and nonresidential fixed investment) vector autoregression estimated with quarterly data for the postwar U.S. economy is consistent with the CPS theory for the regulated (1949Q1–1975Q1) as well as for the neoliberal periods (starting in 1980 or in 1985). Hence, the CPS mechanism seems to be in operation even under neoliberalism.

DOI

https://doi.org/10.7275/3317896

Recommended Citation

Basu, Deepankar; Chen, Ying; and Oh, Jong-seok, "Class Struggle and Economic Flactuations: VAR Analysis of the post-War U.S. Economy" (2012). Economics Department Working Paper Series. 142.
https://doi.org/10.7275/3317896