Re: existence of profits

["William B. Ryan" <william_b_ryan@xxxxxxxxx>]

--

On Mon, 25 Mar 2002 11:13:58
 kk050 wrote:
>As for the answer to debate over the existance of profit, the answer of Rochon
>and that of Seccareccia are surely possible. However, they are based on the
>assumption that all money, required to invest irrespective of variable or fixed
>capital, is comen from bank credit.
>I think that the assumption is inconsistent with stylized facts. Because the
>investment is more and more independent of the external fund such as bollowing
>from banks, as markets are global. Then if we assume that some part of
>investment is financed from internal fund such as retained profit, we don't
>have to be puzzuled by the existence of profit, do we?
-------------------------------------

This would be plausible only for economies in favorable balance of trade.  Indeed, it represents the "exogenous" injection of money into their economies.  It cannot be the explanation for the world as a whole.  It does however provide an explanation why export driven economies are superficially prosperous in terms of the level of economic activity.  It also provides an explanation for Japan's current malaise, with the progressive loss of its export markets to China.

>
>
>**************************************
>  Kazuhiro Kurose
>  Graduate School of Economics and Business
>  Administration, Hokkaido University
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