RE: Re: RE: Re: RE: the profit rate & recession

["Devine, James" <jdevine@xxxxxxx>]

> >The profit rate that the BEA measures seems to be in the
> same general league
> >as the "marginal efficiency of investment" of Keynesian
> theory (or Marx's
> >rate of profit, for that matter). The MEI is compared to the
> interest rate,
> >so if MEI > i, the incentive to invest is there. If we
> exclude interest,
> >this kind of comparison is harder. (Of course, the actual
> MEI would involve
> >_expected_ profitability.)
>
> If you really want to get snazzy, you've got to compute a cost of
> capital, which includes the cost of equity, via the capital asset
> pricing model. That's how the big boys do their capital budgeting.
>

I'm trying to lose weight, so as to avoid being too big a boy.
JD