More Keynesian Data

I’ve been struggling with putting together quarterly net operating surplus data for non-fianncial businesses. I have non-financial corporate businesses, but this excludes proprietors. Frustrating.

But I’ve been encouraged by some similar arguments I found poking about the web:

The first is a review of The Rise of Unemployment in Europe: A Keynesian Approach:

The data at hand show that the amount of operating surplus of NFBs transformed into dividends and interest payments in France, the UK, and the U.S. were a staggering 80 percent or more; there were even years when the entire surplus was transferred to owners of financial assets. The capital accumulation rate decreased in all countries, while unemployment; the ratio of financial income to the share of operating surplus for NFBs; the ratio of operating income of NFBs to operating surplus of the entire economy; dividend and interest income as a share of total household income (renters household income share); renters’ share of NFBs; renters’ payments over operating surplus of NFBs; and the ratio of operating surplus of NFBs divided by the operating surplus of the entire economy all increased substantially. Even the rate of technical progress experienced a substantial decline beginning in the mid-1970s, probably because of the decline in capital accumulation.

Go read the whole review. While you’re at it, you may want to take a look at Returns for Non-Financial Business (pdf) and Did the Financial Sector Destroy the Economy?

UPDATE: changed SCB link to point to 2010 doc instead of 2007 doc. Added ILO paper ref.

More Keynesian Data

4 thoughts on “More Keynesian Data

  1. Sergei says:

    Can one of the reasons of the lack of investment be the speed of innovation since it reciprocally defines the profitability of capital?

      1. Sergei says:

        That is true. But the technological revolution (computers, software, etc.) that we experience now drives previously made investments obsolete too fast which makes new investments questionable. As the “time to profit” was significantly *forced* down this has led to two major outcomes: a) the hurdle rate has been increased and b) psychologically it often makes sense to wait a bit for a better/cheaper technology.

        The industry which drives technological revolution lives its own life independent from the rest of the real economy. Its main goal is to innovate and compete for customers with other technological firms. It also takes a relatively small real effort to innovate in this space and two guys can easily create another google which a couple of years later with just 10 thousand employees will be changing the shape of the world. Once they create new innovations, the reproduction of them is essentially cost-free which is why the effects of such innovations are so huge.

        Well, the bottom line of my thought is that if we slow down the pace of technological evolution why might see much more investments in the real world. What do you think?

      2. Yes, that’s true! And you can try to model disruptive investments, that obsolete other investments. However, I don’t want to try to model that 🙂

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