University of Sussex
Browse
Scharfenaker Semieniuk_ MECA_MS_1047.pdf (1.61 MB)

A statistical equilibrium approach to the distribution of profit rates

Download (1.61 MB)
journal contribution
posted on 2023-06-09, 01:02 authored by Ellis Scharfenaker, Gregor Semieniuk
Motivated by classical political economy we detail a probabilistic, “statis- tical equilibrium” approach to explaining why even in equilibrium, the equal- ization of profit rates leads to a non-degenerate distribution. Based on this approach we investigate the empirical content of the profit rate distribution for previously unexamined annual firm level data comprising over 24,000 publicly listed North American firms for the period 1962-2014. We find strong evidence for a structural organization and equalization of profit rates on a relatively short time scale both at the economy wide and one- and two-digit SIC industry levels into a Laplace or double exponential distribution. We show that the statistical equilibrium approach is consistent with economic theorizing about profit rates and discuss research questions emerging from this novel look at profit rate distributions. We also highlight the applicability of the underlying principle of maximum entropy for inference in a wide range of economic topics.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Metroeconomica

ISSN

0026-1386

Publisher

Wiley-Blackwell

Issue

3

Volume

68

Page range

465-499

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2016-05-11

First Open Access (FOA) Date

2018-06-08

First Compliant Deposit (FCD) Date

2016-05-11

Usage metrics

    University of Sussex (Publications)

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC