A Computational Approach to the Marxian Circuit of Capital Model

Document Type

Article

Publication Date

1-1-2025

Identifier/URL

42141304 (Pure)

Abstract

The paper reconstructs the Marxian circuit of capital model to identify distinctive dynamics of the growth and reproduction of the total capital stock. The growth of the financial, productive, and commercial capital stock and the reproduction of the capital-labor relation in this model is primarily induced by the change in both the three capital flows that link the three capital stocks and time-lags tied to the accumulation of each capital stock. The paper develops a representative Marxian circuit of capital model in a single sector and conducts a series of comparative dynamic analyses through simulations. The simulation result shows that there exist nonlinear interactions among the three capital stocks that generate divergent growth patterns of the total capital stock, and these dynamic interactions are induced by the change in both three capital flows and time-lags required for the reproduction of the system. The simulation approach to the model also sheds light into the nature and effect of financialization and the realization crisis on the growth pattern of the three capital stocks, in which delays in either mobilizing financial capital outlay or in sales of final products alters the composition of the total capital stock, thereby pointing to the potential presence of distinct and divergent “growth regimes” of capital accumulation.

Comments

Publisher Copyright: © The Author(s), under exclusive licence to European Association for Evolutionary Political Economy and EAEPE Academy GmbH 2025.

DOI

10.1007/s43253-024-00142-0

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