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  • ItemOpen Access
    Endogenous constraints on full productive capacity in a free-market economy
    (Springer Link, 2023-04-07) Cole, Nicolas D
    The full employment interest rate implicit in classical economic theory is 4½%, deduced by including the rate of normal profit in a simple macroeconomic model. By not fixing the interest rate at this optimum, Central Banks endogenously maintain excess productive capacity, cause unemployment, and encourage the exploitation of Labour by Capital.
  • ItemOpen Access
    The full employment interest rate implicit in classical economic theory
    (Springer, 2022-06-29) Cole, Nicolas D
    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.