This paper questions Van Lear's (1999) conclusion that the cyclical profit squeeze mechanism is irrelevant for understanding post World War II business cycles. It is shown that his conclusion erroneously emanates from either a misreading of the evidence or the application of an overly restrictive and irrelevant condition for the existence of a profit squeeze. It is concluded that Van Lear's data and other data in the literature support the cyclical profit squeeze as a viable explanation of post war cycles.
Boddy, R., & Crotty, J. R. (1975). Class conflict and macro-policy: The political business cycle. Review of Radical Political Economics, 7(1), 1-19.
2.
Goldstein, J. P. (1985). The cyclical profit squeeze: A Marxian microfoundation. Review of Radical Political Economics, 17(1/2), 103-128.
3.
Goldstein, J. P. (1986). Markup variability and flexibility: Theory and empirical evidence. Journal of Business, 59(4), 599-621.
4.
Goldstein, J. P. (1996). The empirical relevance of the cyclical profit squeeze: A reassertion. Review of Radical Political Economics, 28(4), 55-92.
5.
Goldstein, J. P. (1999a). The simple analytics and empirics of the cyclical profit squeeze and cyclical under-consumption crises: Clearing the air. Review of Radical Political Economics, 31(2), 74-88.
6.
Goldstein, J. P. (1999b). Predator-prey model estimates of the cyclical profit squeeze. Metroeconomica, 50(2), 139-173.
7.
Sherman, H. J. (1997). Theories of cyclical profit squeeze. Review of Radical Political Economics, 29(1), 9-17.
8.
Van Lear, W. (1999). Profitability in business cycle theory and forecasting. Review of Radical Political Economics, 31(2), 46-60.
