1. Austerity, investment and profit
Michael Roberts
Rio, June 2018

2. Trump’s fiscal stimulus

3. Sluggish growth

4. Advanced economies: spending rose before the GFC

5. Emerging economies: also

6. Investment is the swing factor

7. Business investment drops the most

8. Keynesian identities Let us consider these identities. We start with:
National income = national expenditure. 
National income can then be broken down to Profit + Wages;
and National expenditure can be broken down to Investment + Consumption. 
So Profit + Wages = Investment + Consumption. 
Now if we assume that wages are all spent on consumption and not saved, then
Profits = Investment.

9. The cycle of profit

10. A world rate of profit

11. Investment follows profitability

12. Capex and net income

13. Profits call the tune

14. Keynes versus Marx
Let us return to the Keynes-Kalecki macro identity. It can be re-designed as:
Investment – (non-capitalist) Savings = Profits
But the Marxist logic is that the causal connection is the opposite.
Thus the equation looks like this.
Profits + (non-capitalist) Savings = Investment

15. Deviation from the pre-crisis IMF real growth forecast and fiscal tightening

16. The Krugman multiplier

17. The Keynesian multiplier

18. China: Keynes or Marx?

19. Government spending before crises

20. The Marxist multiplier

21. Comparing the two

22. Brazil: Keynesian multiplier

23. Brazil: Marxist multiplier