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Saturday, February 09, 2013

A 'Sinkhole for Purchasing Power'

Paul Krugman:

Profits and Business Investment, by Paul Krugman: ... Below are corporate profits (after tax and inventory valuation adjustment) and nonresidential fixed investment (roughly speaking, business investment), both measured as shares of GDP. These aren’t exactly matched figures, because not all business investment comes from corporations. Still, I think they illustrate an important point. Business investment isn’t actually all that low... What’s really out of line with previous experience is the level of corporate profits, which is arguably serving as a kind of sinkhole for purchasing power.

    Posted by on Saturday, February 9, 2013 at 10:27 AM in Economics | Permalink  Comments (48)

          


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