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Business and Economic Research
Article . 2012 . Peer-reviewed
Data sources: Crossref
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Business and Economic Research
Article
License: CC BY
Data sources: UnpayWall
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Profit and Economic Growth

Authors: Gennady Bilych;

Profit and Economic Growth

Abstract

Many facts attest to the existence of close ties between producer profits and economic growth. In the first place, in periods of economic growth, an overwhelming number of enterprises have fairly high profits. The markets are dominated by general confidence and optimism. A wholly different picture can be seen when economic growth is absent. In crisis conditions, producer profits tend towards zero, a few enterprises have insignificant profits and others suffer losses. In the second place, profits serve as the main source of investments, and as such the magnitude of economic growth depends on the amount of profit. If loans are a source of investment, then the guarantee for its repayment is precisely profit. The amount of loans received is directly dependent on the size of profits. In the third place, in a simple, commodity exchange economy the sole potential for generating profits is acquisition of additional commodities. It follows that the total profit of all economic agents is precisely equal to the cost of additionally manufactured commodities. As such, total profit equals economic growth. In such an economy, the words “profit” and “economic growth” practically become synonyms. If it can be proven that the stated equality always occurs, in any economy, then it will become possible to explain in a fairly simple manner the cyclical nature of economic development, to understand the reason for the existence of interest, and to continue drawing together the two branches of economic science: micro- and macroeconomics.

Keywords

Economic growth, Profit, Perfect competition, Imperfect competition, Economic cycles, Economic crisis, Rent, Interest, jel: jel:Z0, jel: jel:R00

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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