Profit rate and capital accumulation in Brazil: theoretical conceptions, historical analysis and causal relationship

Abstract

This paper analyzes the relationship between profit rate and capital accumulation from both theoretical and empirical perspectives. We discuss the main approaches to the role of profitability in macroeconomic analysis, with emphasis on the Marxian political economy. We present a brief historical description of the profit rate and the capital accumulation rate for Brazil between 1953 and 2017, evaluating their components through Weisskopf's (1979) decomposition. We also apply Toda and Yamamoto’s (1995) procedure to test Granger´s hypothesis of non-causality between profit rate and capital accumulation rate. Granger non-causality tests support unidirectional causation from profit rate to capital accumulation rate in Brazil between 1953 and 2017.