The Falling Rate of Profit under Fixed Capital and Stable Labor Shares
Abstrak
This paper incorporates fixed capital into a multi-sectoral input-output model to reassess the Okishio Theorem. We establish the existence of a critical wage elasticity strictly less than unity, beyond which cost-reducing technical progress leads to a declining equilibrium rate of profit. This implies that profit rates may fall even under Kaldor's Stylized Facts or a moderately declining labour share, significantly extending the theorem's domain of validity. Game-theoretic analysis reveals a strict Prisoner's Dilemma structure underlying technical adoption. Empirical evidence from Chinese industrial data confirms that fixed capital intensity exerts a significant dampening effect on the profit-enhancing impact of productivity growth.
Topik & Kata Kunci
Penulis (1)
Jiyuan Lyu
Akses Cepat
- Tahun Terbit
- 2025
- Bahasa
- en
- Sumber Database
- arXiv
- Akses
- Open Access ✓