Rates of Profit and Interregional Flows of Capital

Bibliographic Data

ID8377255
AuthorsM Webber (0000-0002-7697-3453, The University of Melbourne, corresponding author)
Year1987
Volume77
Issue1
Pages63-75
Publication date1987-03-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueAnnals of the Association of American Geographers (JOURNAL)
Journal identifiersISSN: 0004-5608 • E-ISSN: 1467-8306
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1111/j.1467-8306.1987.tb00145.x
OpenAlexW2063913948
LanguageEN
Citations received12
References cited13

This paper investigates the flows of capital in a model of an economy that has two regions. Technology is fixed and independent of scale. Investment is controlled partly by individual firms and partly by central financial institutions. In both cases, investment is divided between regions in a ratio that depends on the rate of profit earned in them. The system has a unique equilibrium growth path. The central conclusion of the model is that even if capital does tend to flow from less to more profitable regions, that flow does not in itself guarantee that profit rates tend to equalize. Therefore net capital flows do not point to higher profit regions, and high relative productivity is not necessarily correlated with high relative growth rates

Capital deepening · Capital flows · Capital formation · Economics · Financial capital · Fixed investment · Investment (military) · Microeconomics · Monetary economics · Net capital rule · Net profit · Profit (economics) · Rate of profit · Economic Growth and Productivity · Economic theories and models · Economic Theory and Policy

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