Economic Growth and the Rate of Profit in Colombia 1967–2019: A VAR Time-Series Analysis

Abstract

In recent decades, there has been a growing literature dealing with the empirical estimation of the rate of profit and other Marxian variables in several countries. Nonetheless, there has been a paucity of econometric research about the impact of those Marxian variables on the growth rate in developing countries. This article seeks to evaluate the rate of profit and the rate of accumulation as determinants of the growth rate in Colombia during 1967–2019, using a generalized vector autoregressive model. We find that both variables are statistically significant and, in concordance with Marxian theory predictions, affect positively the growth rate. We also identify direct impacts of the growth rate over the profit rate and the accumulation rate as well as an economic relevant relationship between these latter variables.JEL Classification: B51, C22, O54