Abstract for: A System Dynamics Design of the US Economy Exit from the Stern Crisis
This paper re-defines two hypothetical laws of capital accumulation by including endogenous profit investment share and establishing an explicit inverse relation between this share and capital-output ratio. Other main state variables are labour productivity, employment ratio and unit value of labour force. A comprehensive Phillips equation, governing real labour compensation, is an element of a hypothetical law (HL-IR). Projecting future macroeconomic evolution takes into account structural changes in primary distribution of net value added. After the recent neo-conservative defeat there is no place for stabilising policy with the same or similar aggressiveness as in 2002-2007. Based on the US macroeconomic data mainly for 1969-2007, computer simulation runs for a later period (through 2060) exhibit how a postponed non-aggressive application of CL-IR in 2012 and afterwards could smooth out long waves of capital accumulation and shorten a period of fluctuations from 24-27 to 14-16 years in the restructured US economy compared to evolution based on HL-IR. The present stern crisis of the capital accumulation, probably deepest after the World War II, will last until 2018-2022 when the pre-crisis maximum of net output is restored and 2023-2026 when the pre-crisis maximum of employment is reached again.