Content area
Full text
Abstract
This paper analyzes the impact of the Great Recession on the economies of the United States and the major economies of Europe (Germany, France, United Kingdom, Italy, Spain), based on the analysis of the national accounts of the countries chosen. The paper provides additional weight to the conclusions reached by Piketty, but using different sources: a reduction in the share of wages in national income and an increase in social inequality. This can be explained because the downward trend in capital productivity cannot be corrected, so an increase in the share of gross operating surplus in national income (q) and in social inequality is bolstered to maintain the rate of profit, a process which is accompanied by the growing financialization of the economy.
JEL: B22, B52, C40
Keywords: business cycle, rate of profit, business profits, capital productivity, economic inequality, European Union, United States, Piketty.
1. Introduction
The Great Recession has opened up a new panorama in analysis of the economic crisis, with economic approaches that are less conventional. The more conventional arguments are based primarily on financial, stock-market and monetary factors, but the ongoing recession is forcing social scientists - with holistic views of their disciplines - to work with parameters that are more permeable. They offer perspectives that, though rejected by most of academia, could help to establish a different analysis of the economic crisis. Reviving the concept of the business cycle is one of the key ideas. Although the very existence of the business cycle had been called into question by the staunchest proponents of equilibrium economics, it is very much present in real-world economics, and is beginning to be accepted by its main detractors. Historically, the "industrial cycle" was identified and was linked to fluctuations in investment demand in the form of inventory restocking or fixed capital, the two variables most closely tied to the short-run cycle or industrial cycle, which spans no more than ten years (Sylos Labini 1988). However, there were also analyses of long-run cycles driven by technological developments (Fagerberg and Verspacen 2009; Castro-Fernández de Lucio 2013). It is in this long-term perspective that the hypothesis on the law of the tendency of the rate of profit to fall (LTRPF) and the severe crisis of capitalism was...