Aggregate capital productivity in the US economy, 1964--2001

In the decomposition of the US macroeconomic pre-tax rate of profit as the product of profit share and capital productivity, this paper considers the role of capital productivity over the period 1964--2001. The primary finding is that prior to 1982 capital productivity fell because capital deepening proceeded faster than labour productivity growth, whereas from 1982 to 1997 the opposite occured. If, prior to 1982, the US economy was characterised by Marx-biased technical progress, what requires explanation is why labour productivity continued to grow after 1982 in the absence of sufficient capital deepening. The paper explores various hypotheses, contrasts neoclassical and classical notions of technical change, and investigates the robustness of its results to the productive--unproductive distinction and to accounting for changes in capacity utilisation. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.