Tugan's 'bubble': underconsumption and crises in a Marxian model

Article Abstract:

Economists Tugan and Baranowsky theorized that economic crises due to underconsumption will not occur since capitalists will continue to invest in capital goods or machines to make more machines. The phenomena of assets increasing in value despite questionable intrinsic utility was described as a 'bubble.' Bubbles happen when individuals invest in assets in the hope of selling at increased prices to other individuals with the same intentions. While bubbles may give rise to periodic booms and crashes, they help remove inefficiency from an economy.

Research, Economic aspects, Consumption (Economics), Marxist economics, Capitalism, Capitalists and financiers

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New solution or re(in)statement? A reply

Article Abstract:

Febrero argues that the approach advocated in Mohun (1994) yields paradoxical results unless the composition of net output stays constant. The interpretation of labour values, prices and the link between them differs from the D-F approach, which asserts a primacy to the consideration of aggregates and their class distribution.

Economic research, Observations

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