Petukhov Valery A. – Candidate of Science, Economy, Senior Lecturer of the Department of Economic Theory, Financial University under the Government of the Russian Federation (Financial University under the Government of the Russian Federation)
The author proves that not only living labor, but also machinery, equipment, etc. play an active (not a passive) profit-making role. The author also proves that profit can be earned without the use of hired labor. That allows radically improve the theory of David Ricardo and prove that in modern conditions of high capital-to-labor ratio the wave-like fluctuations of profit rates are caused by changes in cost-benefit ratio (which include labor, amortization of machines, equipment, etc.). The analysis of these wave-like fluctuations of profit rate allows creating a modern model of medium-term economic cycle, and to show the interaction between this cycle and Kondratieff wave. An empirical test of the predictive capabilities of this model shows very good results.
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