Causes of changes in profit rate in West Germany after World War II

This dissertation analyzes the behaviors and causes of changes of the rate of profit in West Germany after the Second World War. I present a clear method for calculating the rate of profit and its factors and this method facilitates cross-country comparisons.; I decompose German total industry into two main sectors: the manufacturing sector and the nonmanufacturing sector. I present net profit rate results for both subsectors as well as for the whole economy and I establish stylized facts about the behavior of, and the causes of changes of, the German rate of profit. I decompose my net profit rate results into two factors to further investigate the causes of its observed behavior: output-capital ratio and profit share. Because I find the profit share is generally the main factor that causes the changes in the profit rate. I decompose my profit share results into two factors: labor cost and labor productivity.; The results show that after World War II in the West German economy, differing behaviors in the profit share and the net profit rate are primarily, though not exclusively, the result of differing relations between the rates of growth of labor cost and labor productivity. Also, the results of the rate of profit in both the nonmanufacturing sector and the manufacturing sector should be considered when one intends to draw general stylized facts about the behaviors and causes of changes of the rate of profit.