Professor Mejorado co-authors new article in the International Journal of Political Economy

Professor Ascension Mejorado co-authored a new article, Profitability and Secular Stagnation: The Missing Link, in the International Journal of Political Economy. Co-authors Mejorado and Manuel Roman attribute the pattern of long term and sustained low economic growth (characterized as secular stagnation) to the depressing effect of low profit expectations on the business sector’s capital accumulation rate. The authors interpret profit expectations as forward projections of current and past profit trends. Neither major reductions in the wage share of about 80% of all workers nor credit injections designed to propel effective demand growth offset the impact of relative lower profitability on investment. The goal of this article is to unveil the structural obstacles to long-term economic growth.