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A networkmodel for the complex behavior of the rate of profit : exploring a simulation model with overplapping technological revolutions

Author

Listed:
  • Leonardo Costa Ribeiro

    (Inmetro, Rio de Janeiro, Brazil)

  • Leonardo Gomes de Deus

    (Cedeplar-UFMG, Belo Horizonte, Brazil)

  • Pedro Mendes Loureiro

    (SOAS, London, UK)

  • Eduardo da Motta e Albuquerque

    (Cedeplar-UFMG, Belo Horizonte, Brazil)

Abstract

This article proposes a network model to replicate the behaviour of the profit rate in the long run. Specifically, it accounts for the results of an empirical investigation of the profit rate in the US, which show that it has fractal properties and its complexity changes over time. The starting point of the model is Marx’s insights on the interplay between the tendency of the rate to fall and its countertendencies. It combines these insights with the persistent generation of new commodities – inventions – and a specific set of new branches of production that triggers technological revolutions. A simulation running this network model successfully replicates historical features of the system.

Suggested Citation

  • Leonardo Costa Ribeiro & Leonardo Gomes de Deus & Pedro Mendes Loureiro & Eduardo da Motta e Albuquerque, 2017. "A networkmodel for the complex behavior of the rate of profit : exploring a simulation model with overplapping technological revolutions," Textos para Discussão Cedeplar-UFMG 555, Cedeplar, Universidade Federal de Minas Gerais.
    • Handle: RePEc:cdp:texdis:td555
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    File URL: https://www.cedeplar.ufmg.br/pesquisas/td/TD%20555.pdf
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    References listed on IDEAS

    as
    1. Nathan Rosenberg & Manuel Trajtenberg, 2009. "A General-Purpose Technology at Work: The Corliss Steam Engine in the Late-Nineteenth-Century United States," World Scientific Book Chapters, in: Nathan Rosenberg (ed.), Studies On Science And The Innovation Process Selected Works of Nathan Rosenberg, chapter 6, pages 97-135, World Scientific Publishing Co. Pte. Ltd..
    2. Agarwal, Rajshree & Gort, Michael, 1996. "The Evolution of Markets and Entry, Exit and Survival of Firms," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 489-498, August.
    3. Schmalensee, Richard, 1989. "Inter-industry studies of structure and performance," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009, Elsevier.
    4. Rosenberg, Nathan & Frischtak, Claudio R, 1983. "Long Waves and Economic Growth: A Critical Appraisal," American Economic Review, American Economic Association, vol. 73(2), pages 146-151, May.
    5. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    6. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
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    More about this item

    Keywords

    Rate of profit; Technological revolutions; Marx; Complex systems; Metamorphoses of capitalism; Simulation models;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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