Article

 

THE ROLE OF TECHNOLOGY, DISTRIBUTION AND DEMAND IN THE DEVELOPMENT AND CRISIS OF THE POSTWAR GREEK ECONOMY (p.65-90)

by

Thanasis MANIATIS, NATIONAL AND KAPODISTRIAN UNIVERSITY OF ATHENS

Costas PASSAS, NATIONAL AND KAPODISTRIAN UNIVERSITY OF ATHENS

Keywords : Profitability, Technical change, Effective demand, Income distribution, Greek economy

JEL classification : B51, E11

Abstract

In this paper we examine the behavior of the net rate of profit and its constituents in the Greek economy over the 1960-2013 period, and using structural break tests we distinguish the postwar era into four medium run and five short run periods. Then, decomposing the rate of profit into a technology, a distribution and an effective demand component we find that in all three time horizons technological change (rising capitalization of production) appears to be the most important driver of profitability, with distribution also being important during the stagflation crisis of the 1970s. The role of aggregate demand and capacity utilization is limited except for the period of the current crisis when the state and capital in an effort to bring about capital destruction and labor capitulation have adopted drastically restrictive policies which have affected seriously profitability in a negative way.