1. Friedman clarified his original statement as being, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian” (White , p. 313).
2. Residual profit is defined as the sum of profits in excess of those required by a firm to remain in operation.
3. At this point, as we move into a more technological age, maybe we should ask if our rather archaic means of capital measurement is measuring capital correctly. Whereas the question is a good one, Barkai estimates that to reinstate profit to pre-1980s levels the value of capital would need to be three times higher than that currently registered on the national accounts (p. 11).
4. In particular, Autor et al. lay out a model of industries occupied by dominant firms that, because of their size and low capital costs, are able to extract significant economic rent given that prices are set by the, albeit smaller, competitive-fringe firms. In such a model, the dominant firm’s productivity increase also results in higher concentration driven by the firm’s growth, higher markups driven by production cost declines of the dominant firm, and a decline in the labor share.
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