American Economists Debate Explanations for Slow Growth Since the 1970s
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Robert Brenner developed an influential theory of "long downturn" since 1973, attributing it to overcapacity and falling prices/profitability in manufacturing.
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Brenner's theory has been critiqued for logical gaps and empirical weaknesses, including questionable stagnation claims and unreliable profit rate measures.
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Anwar Shaikh provides an alternate Marxian falling profit rate theory based on "real competition," but it relies on a flawed model of competition.
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Empirical research shows idiosyncratic product demand, not cost/price, is key to firm performance, undermining Shaikh's model.
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Falling profitability is a poor explanation for economic performance; coordination failures between units better explain capitalist crises.