The full employment interest rate implicit in classical economic theory
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Cole, Nicolas D
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Cole, Nicolas D (2022). The full employment interest rate implicit in classical economic theory, Evolutionary and Institutional Economics Review, Volume: 19, Issue: 2, pp. 625-643
Abstract
By including the rate of normal profit in a simple model of the macro-economy, the full employment interest rate is deduced to be 4½% at which Labor is not exploited by Capital. Criticisms by Marx and Keynes of the free-market economy were misdirected at Classical theory instead of the manipulation of interest rates by Central Banks to favour Capital over Labor.
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Rate of Normal Profit, Classical Theory, Central Banks, Full Employment Interest Rate
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