[OPE-L:4987] Re: RRi and The Rate of Profit

Chai-on Lee (conlee@chonnam.chonnam.ac.kr)
Tue, 13 May 1997 06:52:13 -0700 (PDT)

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As regards the RRI in the discussion between John and Duncan, I should add
some more points on the capital gain and loss.

There are three kinds of gains and losses.

(A) When there is a change in the expectations of future revenues and
costs, or in the expectations of interest rates or in both.

(B) When the revenues and costs are realized differently from those that
are expected before, thus making new expectations rendering capital gains
and losses.

(C) Investment gains and losses that occur when the market price of capital
goods deviates from the present value of the sum of the expected revenues
of the capital goods.

In either (A) or (B) or (C), the general (fixed) rate of profit (an
interest rate) is presupposed as given in calculting the capital gains and
So, I think, we should not take the capital gains and losses into account
when discussing the falling rate of profit?

In solidarity,