The Rate of Profit, Aggregate Demand, and the Long Economic Expansion in the United States since 2009

Abstract

The current economic expansion in the United States, which began in the summer of 2009, has lasted for more than nine years as of this writing, making it the second longest expansion since the end of World War II. The previous two expansions, of the 1990s and 2000s, were prolonged by big asset bubbles, which have played a key role in the neoliberal era in promoting long economic expansions. However, the current expansion has not seen an asset bubble large enough to significantly affect the macroeconomy. This paper examines the expansion since 2009 by analyzing the movements of the rate of profit, and its determinants, and the role of aggregate demand, with the aim of determining the factors that have kept crisis tendencies at bay so far. JEL Classification: E32, E30, E11, E02