Value Circulation, Economic Structure, and the New Development Paradigm: A Theoretical Framework of Political Economy and International Comparison

Abstract

This study constructs a theoretical framework for understanding the new development paradigm based on value circulation and the reproduction theory of Marx. According to these theories, the essence of economic circulation is value circulation, the core of which is mutual matching among the structures of technological, distribution, demand, and production. We adopted a three-sector reproduction model with fixed capital to understand different development paradigms under various combinations of the four aforementioned structures. On this basis, we use the 1957- 2017 input-output table to construct the three-sector tables and explain the logic of China's economic structure change and the characteristics of the resulting circulation patterns. We also compared the economic structures and circulation patterns of the United States and Japan with those of China to shed light on China's choice of future economic circulation patterns and the new development paradigms.