Profit without Accumulation: The Recipe for Finance-Led Capitalism

By Laurent Cordonnier

In a capitalist economy, where profits are entirely saved and wages are entirely spent on consumer goods, Kalecki’s theory asserts that the rate of profit is equal to the rate of capital accumulation. The divorce between these two variables, as observed during the last twenty years in the US as well as in France, is a conundrum. This paper shows that the spectacular increase dividend distributions explains in theory (albeit in part) this divorce. It is suggested that new corporate governance and the rise of stockholders power have contributed to this phenomenon.


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