Skip to main content
Return to Brookings Papers on Economic Activity
BPEA Article

Is the Rate of Profit Falling?

and

Abstract

THE PRETAX net rate of return on corporate capital reached a thirty-year low in 1974 of only 6.4 percent, according to the estimates that we develop in this paper. Although profits have rebounded substantially since then, there is still a widespread suspicion that the rate of profit may have been declining over a number of years. A primary purpose of this paper is to use the new official estimates of profits, capital consumption, and the capital stock to assess whether such a decline has in fact occurred.

Authors

Lawrence H. Summers

Charles W. Eliot University Professor and President Emeritus - Harvard University

Commenter

Get daily updates from Brookings