Corresponding to the fall in profit rates was -- in the early 1980s -- the drop in the number arrived at if you divide the market value of firms by the replacement costs of their assets, the famous Q ratio associated with Prof. James Tobin. In theory, the value attached to a firm by the market and the cost of replacing its assets should be the same.
the firm's capital stock -- its assets -- means nothing if the firm is not producing profits
But of course the market could decide that the firm's capital stock -- its assets -- means nothing if the firm is not producing profits.
Corresponding to the fall in profit rates was -- in the early 1980s -- the drop in the number arrived at if you divide the market value of firms by the replacement costs of their assets, the famous Q ratio associated with Prof. James Tobin. In theory, the value attached to a firm by the market and the cost of replacing its assets should be the same.</s>But of course the market could decide that the firm's capital stock -- its assets -- means nothing if the firm is not producing profits.</s>the firm's capital stock -- its assets -- means nothing if the firm is not producing profits