Discussion Paper No.273
Two Business Cycles within the Industrial Cycle of 1991-2009:
A Marxist Analysis of the Real Economic Groundof the 2008 Financial Crisis
Ken Hirano
Faculty of Commerce,
Chuo University

February 2017

INSTITUTE OF ECONOMIC RESEARCH
Chuo University
Tokyo, Japan

Two Business Cycles within the Industrial Cycle of 1991-2009:
A Marxist Analysis of the Real Economic Groundof the 2008 Financial Crisis

Ken Hirano
Faculty of Commerce,
Chuo University
Tokyo, Japan
Email: k-hirano@tamacc.chuo-u.ac.jp

Abstract
There were two bubble economies recently: IT bubble in the last-1990s and housing bubble inthe 2000s. The result of the former was the mild recession in 2001, but the one of the latter
was the severe crisis in 2008-09. Why were they so different? Behind phenomenon of two
business cycles, there was one industrial cycle in the real economy in 1991-2009. After WWII,
with interventions by the government, U.S. economy have prevented from crises. That hasdelayed the excess capital adjustments and prolonged the length of industrial cycles. There
were two industrial cycles after 1960 at least: the cycles of 1960-1990 and 1991-today. The
2000s was the stagnant phase of the industrial cycle after 1991. For that reason, the bankers
had to use CDOs and take risks by themselves in order to generate bubble. That was the real
economic ground of the 2008 financial crisis.

Keywords
financial crisis, reproduction schema, industrial cycle, excess capital1

Introduction
The financial crisis and recession in 2007-09 was the most serious economic downturnin the U.S. since the Great Depression. Many Marxian economists have argued that this crisis
was closely related to certain defining features of the neoliberal economic order that had
prevailed over the previous three decades, above all, the combination of stagnant productive
capital accumulation and the phenomenon of “financialization.”1 While I am in generalagreement with this argument, I wish to suggest that further investigation is necessary to
clarify how and why that specific configuration of economic phenomena underwent asignificant transformation in the 1990s and the 2000s. The reason for this should be apparent:
the so-called “New Economy” and IT bubble of the 1990s were conjuncturally “successful” andculminated only in the mild recession of 2001, while the housing bubble of the early to mid2000s issued in the severe financial crisis of 2008. In short, neoliberalism succeeded in the
1990s and failed in the 2000s. In this paper, I compare the two business cycles of 1991-2001
and 2001-09 in order to illuminate the real economic ground of the first cycle’s success and thesecond’s failure.
The principal postulates of this paper are as follows. Actual capitalist economic growth
is a mixture of “endogenous growth” and “exogenous growth.” The former is growth supported
by Personal Consumption Expenditure and Gross Investment: growth generated by productive
capital investment. It proceeds through cycles of capital accumulation, that is to say, theactivation of capital investment, the generation of excess capital, recession, and thestagnation of capital investment. Karl Marx called this the “industrial cycle.” Exogenous
growth, by contrast, is growth supported by Keynesian aggregate demand control policies,
expenditures by foreign residents, and ephemeral bubble economies. Such stimulants toaggregate demand can reinforce the boom phase of the so-called “business cycle.”
There were two business cycles across the 1991-2009 period, but these wereencompassed by one industrial cycle (that is, a single cycle of capital accumulation). Growthduring the business cycle of 2001-09 relied for the most part on the “exogenous” demand
generated by the housing bubble in the final and stagnant stage of the industrial cycle.
Investment bankers had to assume big risks of their own, as well as sell many high risk
“financial instruments,” in order to generate a bubble economy under otherwise stagnant
conditions. That activity was the immediate cause of the credit crunch in 2007-09. Thus,
stagnation in the “real” (“non-financial”) economy in the 2000s was the real “ground” of the
1 For example, see Moseley (2011), Smith and Butovsky (2012), Brenner (2009), and Duméniland Lévy (2012). While sharing this general assessment, these analysts advance very different
theoretical interpretations. Moseley and Smith-Butovsky see Marx’s law of the tendency of therate of profit to fall as the root of the crisis. Brenner identifies the cause in overcapacity and“asset price Keynesianism.” Duménil-Lévy emphasize cumulative disequilibria fostered by U.S.
global hegemony. On the close interconnection of neoliberaism, stagnant productive capital
accumulation, and “financialization,” see Bakir and Campbell (2010), as well as Orhangazi(2008). The analysis presented here, it should be noted, can be articulated with and seen ascomplementary to such a variety of contemporary theories of crisis as above. It is offered not
as an “alternative” Marxist theory of crisis but as a supplement to the controversy amongst
Marxist political economists surrounding the roots of the current global slump.
2

financial crisis.
My arguments are set forth in the following order. In section 1, I examine themechanisms of economic growth over the period 1991-2007 by dividing the latter into two
components: “endogenous growth” and “exogenous growth.” Then, by using macroeconomic
statistics, I show that economic growth in the first half of the 1990s was entirely endogenous;
that in the latter half of the 1990s it involved a mixture of endogenous and exogenous factors(above all, the Information Technology bubble); and that in the 2000s it was mostly exogenous– more specifically, that it was driven by financial speculation in crude oil and housing.
In the first half of section 2, I show, through detailed empirical analysis, that the“endogenous growth” looks very similar to what Marx called the “industrial cycle,” and,furthermore, that the economy of 1991-2009 experienced a single industrial cycle. In addition,in the latter half of section 2, I show that, since World War II, industrial cycles have becomemuch longer than business cycles and that the principal reason for this has to do with increased
government interventions (in evolving ways) to stimulate “exogenous demand” – always with aview to preventing economic crisis and spurring growth. Capitalist states have acted topostpone excess capital reduction (what Marx called the “slaughtering” of capital values) andhave thereby brought about significantly prolonged industrial cycles.
1. Expanded reproduction and the circulation of the total social capital, 1991- 2007
1.1 Analytical method
I derive my method of analyzing economic growth from Marx's own theory. In chapters 20-21 ofCapital, volume II, Marx described the necessary conditions for satisfactory and continuous
capitalist reproduction in his so-called “reproduction schema”.2 He distinguished two
fundamental economic sectors: Department I, which produces means of production, andDepartment II, which produces means of consumption. An expansion of production in either
department requires investment of both variable capital (labor power) and constant capital(facilities and materials). Investment in variable capital increases the demand for the productsof Department II, and investment in constant capital increases the demand for Department I
products. If the expansion of production in the two departments corresponds to the actual
increases in the two types of demand (in both material and value terms), the process of
expanded reproduction will be satisfactory and continuous.
This schema suggests that there are three elements in the expanded reproduction
process: 1) the expansion of production, 2) capital investment (additional objects of labor,means of labor, and labor power), and 3) the increase in demand (for raw materials, fixed
capital, and means of consumption). These three elements form an “autonomous” engine of
economic growth. The increase in demand spurs expansion of production, the expansion of
production requires capital investment to increase capacity, and capital investment further
increases demand. The end of this cause-and-effect sequence is the same as its starting point.
Accordingly, this sequence is an autonomous circuit functioning as an engine of economic
2 See Marx (1978).
3

growth.
Marx argued that if the increase of demand and the expansion of production match eachother, expanded reproduction will be satisfactory and continuous. However, in general, they do

not match, precisely because they involve two different motives for capital investment. The
first motive is captured in the “reproduction schema”: heightened demand leads firms to invest
to increase their capacity. In this regard, the investment is adjusted to more or less match thedemand. The second motive is related to competition among firms, as described in chapter 12of Capital, volume I, and pertains to the concept of relative surplus value. Firms invest to
become more efficient than their competitors.3 Firms strive to achieve efficiency above thesocial average in order to earn excess profits, generating a dynamic of endless competition.
Owing to the competitive motive, investments tend to create excess capacity, which must be
adjusted sooner or later. The upshot is that the process of expanded reproduction becomes acycle, one in which excess capacity is generated during prosperity and then destroyed in orderto adjust it to reduced levels of demand during periods of crisis and stagnation. Marx called
this the “industrial cycle.”
Let us now apply these ideas to the analysis of modern macroeconomic statistics. In
Marx's theory, capital investment is defined as the addition of variable capital and constantcapital to production via the reinvestment of profits. The annual turnover of invested variable
capital forms employees’ compensation, which are the main source of household funds standing
behind “Personal Consumption Expenditures.” On the other hand, invested constant capital is“Gross Investment” and “Intermediate Demand.” However, Value Added,4 which plays thecentral role in every System of National Accounts (SNA), does not take account of“Intermediate Value.” In fact, Gross Domestic Product (GDP) estimates encompass only Personal
Consumption Expenditure and Gross Investment in the domestic private sector. Capital
investment generates these two forms of economic demand, which together form the core of
the four final demands that bring about economic growth. Accordingly, we can conclude thatthese two core demands, which are generated by capital investment, are the determining
factors in GDP growth and its dynamics (including its cyclical fluctuation). Let us call thedemands generated by capital investment “endogenous demand” and the growth flowing fromthese demands “endogenous growth.”
It is worth noting that “Net Exports” and “Government Expenditures” are among thefour final demands defined in SNA, and Marx had planned to address them in later(uncompleted) stages of his larger “Critique of Political Economy.” The demands generated byexport trade and government expenditures, which are independent of investments in capitalist
firms, can be regarded as forms of “exogenous demand.” Elements of Gross Investment andPersonal Consumption can also be considered “exogenous demand” whenever they are generated
for reasons other than capital investment; for example, when they are generated by wealtheffects in a bubble economy. Naturally, we shall call growth arising from these particular typesof demand “exogenous growth.”
3 See Marx (1976).
4 Value Added is roughly equivalent to Marx's Value Product. The biggest difference between
them is that Value Added includes depreciation of fixed capital, but Value Product does not.
4

Economic growth can now be divided into “endogenous growth” and “exogenous
growth,” as shown in Figure 1. The former is an autonomous cause-and-effect sequence of 1)
production, 2) investment, and 3) demand. To begin we will examine whether these threefactors are interconnected in one circuit. If they are, “endogenous growth” can be observed
there. However, if they are not, we will need to search for sources of expanded demand
appearing independently of “exogenous growth.”
Figure 1. Mechanism of economic growth (endogenous and exogenous growth)

1.2 Decomposing the statistics
The following figures and tables depict the major aspects of the two business cycles ofthe period 1991-2007. Table 1 shows the major industries that experiences expanded
production as well as their “demand composition” during two distinct conjunctures: 19912001 and 2001-07. The data indicate that the top 18 industries accounted for 104.4% of real
GDP growth in 1991-2001, whereas the top 16 industries represented 113.6% of that growthduring 2001-07. Furthermore, Personal Consumption boosted the production of mostindustries directly or indirectly, while Gross Investment did so for only a few industries, above
all, construction, manufacturing, and business services.

5

Table 1. Major “production expansion” industries and their demand composition, 1991-2000
and 2002-07

Source: Department of Commerce, NIPA Tables and Input-Output Accounts
Note: (1) Industries with asterisk(*) are not included in “major production expansion industries.” (2) Grayshade shows main demand for the industry.

Figure 2 reveals the dynamic trend in the expansion of major industries, that is, thecontribution of each industry to the real GDP growth. The data indicate that growth trends
were very different as between Manufacturing and many other industries. Manufacturing was
the only industrial sector that was expanding rapidly in the first half of the 1990s, while also
remaining one of the top sectors in the subsequent period. On the other hand, many otherindustries expanded their production only after the mid-1990s.
Figure 3 shows the trend in the productive expansion of detail industries in the
Manufacturing sector. In the first half of the 1990s, several manufacturing industries wereexpanding one after another. The expansion achieved by each individual detail industry was not
so great, but together they accounted for a large expansion. In the latter half of the 1990s,
however, almost all were in decline; only Computer and Electronic Products continued to
expand, and it was the latter that kept the manufacturing sector as a whole expanding . A
similar trend emerged again in the 2000s, with several detail industries expanding in the early
2000s, while Computers and Electronic Products did so only after 2004.
Figure 2. Contribution to real GDP growth of major industries

6Source: Department of Commerce, GDP by Industry
Note: (1) Industries are classified by SIC during 1991-2001 and NAICS during 2001-2009.
(2) “Communications / Information” means “Communications” in SIC during 1991-2001 and“Information” in NAICS during 2001-2009.

Figure 3. Contribution to real GDP growth of detail industries in the Manufacturing industry

Source: Department of Commerce, GDP by Industry
Note: (1) Industries are classified by SIC during 1991-2001 and NAICS during 2001-09.
(2) “Industrial Machinery and Equipment” and “Electronic and Other Electric Equipment” in SIC during
1991-2001 were reorganized into “Computer and Electronics Products” and “Machinery” in NAICS during
2001-09.

Figure 4 shows the trend in fixed asset investment by industry. Throughout the 1990s
and 2000s, the Real Estate sector seemed to be the biggest investor in fixed assets. However,this sector included the imputed service of owner-occupied dwellings, and about 80-95% of
the investment was residential. Thus, a considerable part of the real-estate investment was
generated not by firms but by households. The next biggest sector changed over time : it was
Manufacturing in the first half of the 1990s, Information in the latter half of the 1990s, andMining in the 2000s.
Figure 4. Fixed Investment by industry

7

Source: Department of Commerce, Fixed Assets
Note: Industries are classified by SIC during 1991-2001 and NAICS during 2001-09.

Table 2 shows the employment share and wage level by industry. Throughout the 1990s
and into the 2000s, the Manufacturing sector had the biggest decrease in employment share,
whereas Services registered the biggest increase. However, most of the detail industries in
Manufacturing offered wages that were higher than the average, whereas most of the detailindustries in Services paid out comparatively low wages. Therefore, wage earners were
migrating from the relatively high-wage manufacturing sector to the relatively low-wage
service sector. In addition to this basic trend, two other specific changes should be pointed
out. First, in the latter half of the 1990s, two higher-wage industries, that is, the Informationindustry and the Computer Systems Design and Related Services industry, increased theiremployment share. This change was very significant, resulting in a sharp increase in the labor
share of GDP during this period (See Figure 5). Second, however, this change disappeared in the
2000s, and the longer-term trend became stronger than it had been in the 1990s. Thus, thecompression of employee compensation was the main predominating trend during the 1990s and2000s, albeit with some fluctuation.
Table 2. Change of employment share and average wage by industry

Source: Department of Commerce, GDP by Industry
Note: (1) Average wage = Compensation of employees (Millions of dollars) / Full-time and part-time
employees (Thousands). (2) Square line in employment share change: major decrease, gray shade in
employment share change: major increase, gray shade in average wage: below the average of total
employees.

Figure 5. Labor share of income8Source: Department of Commerce, NIPA

Figure 6 shows the growth rate of personal consumption expenditure by type of goods
and services. The top figure presents the growth rates of expenditure for four types of
products and services, namely, food and beverages, clothing and footwear, housing, and healthcare, which remained at the same level throughout the period. By way of contrast, the lower
figure shows growth rates for ten other types of product, which were lower in the 2000s thanthey had been in the 1990s. This suggests that households suppressed their consumption
expenditure, except for four types of necessities. Furthermore, the average annual growth
rates of private employee compensation were 4.9% in 1991-1995, 7.2% in 1996-2000, and4.2% in 2001-2007. Accordingly, Personal Consumption Expenditures during 2001-07 weremore stagnant than in the first half of the 1990s.
Figures 7, 8, and 9 show the security market, house price, and crude oil price indexes, allof which have skyrocketed since the end of the 1990s, mainly due to speculation.
Figure 6. Growth rate of personal consumption expenditure; by goods and services

Source: Department of Commerce, NIPA Tables

Figure 7. Security price indexes (S&P 500 index and NASDAQ Composite)
9

Source: Yahoo! Finance (http://finance.yahoo.com/)

Figure 8. House price index (S&P/Case-Shiller U.S. National Home Price Index)

Sources: US House Price Index (Case-Shiller): http://data.okfn.org/data/core/houseprices-us

Figure 9. Crude oil price (WTI)

Source: http://ecodb.net/pcp/imf_group_oil.html#index02

Table 3 provides a summary of the main findings detailed above. The data indicate thatthe conditions of productive expansion, fixed capital investment, and employment of majorindustries varied depending on three distinct periods: the first half of the 1990s, the latter
half of the 1990s, and the 2000s. Three distinctively different mechanisms of economic
growth characterized each period.
Table 3. Summary of findings for three distinct periods in relation to specific growth10mechanisms
The first half of the 1990s

The last half of the 1990s

2000s

Manufacturing (Computer andManufacturing (Computer

Manufacturing (several

Electronic Products)

and Electronic Products)

expansion industries

detail industries)← Gross Investment← Three kinds of demands← Main demands← Gross Investment

Major production

Other industries

Other industries← Personal Consumption← Personal Consumption

Fixed capital

Real estate

Real estate

Real estate (huge)investment

Manufacturing

Communications

Mining

The share of Manufacturing was decreasing, while that of Services was increasing.
Employment andWage of Manufacturing was higher than the average, while that of Services was lower.
Higher wage employment by

wages

Communications and Business
Services were increasing.

Personal
Consumption

Rapid eruption in 19911992, then slow down
during 1993-1997.

Rapid growing up again after
1997-2000.

The growth rate in the
2000s was lower than in
1990s.

1.3 Assembling the components of growth into expanded reproduction mechanisms
In the first half of the 1990s, the sector with the largest production expansion was
Manufacturing. In particular, the top five detail industries in Manufacturing were Computerand Electronic Products, Motor Vehicles, Chemical Products, Fabricated Metal Products, andMachinery. Gross Investment and Personal Consumption Expenditure spurred Manufacturing’s
production expansion equally. Four of the five detail industries cited above, excepting chemical
products, were spurred by gross investment. However, Manufacturing was the biggest investor
in fixed capital, with the Computer and Electronic Products, Machinery, Motor Vehicles,
Chemical Products, and Other Transportation Equipment industries investing most. In this way,
production expansion, fixed capital investment, and increased demand were articulated into one
circuit. Thus, “endogenous growth” was evident in the Manufacturing sector in the first half ofthe 1990s.
Production in various manufacturing industries, especially in heavy-chemical industries,
was closely interconnected through intermediate input. Furthermore, their products were
utilized mutually as were their production facilities. As a result, the production expansion took
place consecutively, resulting in a large total expansion. Although Gross Investment demand
was only 35% of Personal Consumption Expenditures during 1991-2001. Although Personal
Consumption Expenditure went into many industries rather diffusely, Gross Investment went
into just a few industries quite intensively.
Despite its strong investment in fixed capital, the manufacturing sector reduced its
overall share of employment. At the same time, the service sector gained employment share,
while evincing wage levels lower than the average of all industries. For these reasons, Personal
Consumption Expenditures did not increase vigorously in the first half of the 1990s, andindustries other than manufacturing did not rapidly expand their production.
In the latter half of the 1990s, many industries other than manufacturing expanded

11their production vigorously, spurred mainly by a tremendous increase in Personal Consumption
Expenditure. Manufacturing, in which Computer and Electronic Products continued to expand
steadily, also remained one of the top industrial sectors, spurred mainly by Gross Investment.
Although two types of demand spurred the major industries' overall production expansion, thequestion remains: which industries generated most of these two types of demand? The biggest
investing industries in the latter half of the 1990s were the Communications Industry andBusiness Services (including Computer and Data Processing Services). Their fixed capital
investments involved IT Hardware and Services to a large extent, so their investments spurred
production of Computers and Electronic Products. These two industries also increased theiremployment share, and their wage levels were higher than the average in all industries. The
increase in higher-wage employment was a major cause of an increase in Personal Consumption
Expenditure. In this way, investment in fixed capital and employment by the Communications
Industry and Business Services generated two types of demand and spurred the production
expansion of many industries, including Manufacturing.
With that established, what caused the growth in the Communications Industry andBusiness Services? The Communications Industry expanded its production mainly with two
types of demand: Intermediate Demand and Personal Consumption Expenditures. On the other
hand, Computer and Data Processing in the Business service sector grew mainly alongside Gross
Investment. Since the early 1990s, an increasing number of firms and households had begun togain access to the Internet. As a result, the usage of communication lines increased, and more
and more firms had constructed Internet or intranet information systems as part of their fixed
capital. This had two consequences. First, many firms and households generated demand for the
goods and services offered by the Communications Industry and by Computer and Data
Processing Services. Second, the fixed capital investment and the increase in higher-wage
employment within these two industries generated Gross Investment and Personal Consumption
Expenditures, which spurred expansion of many other industries. Thus, “endogenous growth”
took place.
Nevertheless, the size of the investment by the communications industry was soenormous that the above “endogenous” interpretation of that investment does not suffice. The
reasons for our scepticism are as follows. First, as shown in Figure 10, the growth of fixed
capital investment accelerated after 1996, even as profit size was slowing. The magnitude ofinvestment grew faster than the mass of profit after 1997, eventually doubling it in 2000.
Second, although the larger investment relative to profit could be rationalized if enormous
demand was being generated, the well-known fact was that the communications industry had
achieved extreme excess capacity. The capacity utilization rate was often in the single digits,
particularly in broadband services.5 In light of this, not only “endogenous demand” but also
“exogenous demand” must be considered in order to explain this investment.
Figure 10. Indicators of the Communications Industry (millions of dollars)

5 On the IT bubble and excess capacity in the broadband services, see Sterling, Phyllis, andMartin (2006), Blumenstein (18 June 2001), and Pearce ed. (2005) .
12

Source: Department of Commerce, GDP by Industry, Fixed Assets AccountNote: Industries are classified by SIC.

Two factors led the communications industry to invest excessively in fixed capital,
namely, the Telecommunications Act of 1996 and the bubble economy at the end of the 1990s.
The 1996 Act defined the deregulations for the telecommunications and broadcasting markets,
so many investors expected a fusion of the two industries, a rush for large-capacity
communication network construction, and a flurry of M&As (mergers and acquisitions). These
expectations reinforced and helped finance IT venture companies, including long-distancetelecommunication carriers, to invest huge amounts of money into facilities and M&As. These
companies were faced with two choices. On the one hand, if IT companies failed to launch farsighted business plans, they would be evaluated as incompetent, their stock prices would
decrease, and they would become vulnerable to acquistition by others. On the other hand, if
they launched fantastical plans to lift their stock prices, a great deal of money could be
attracted, and fantasy could become reality. In this way, huge investments became detachedfrom the growth of actual demand. Thus, we regard much of the demand that generated thehuge fixed capital investment and higher-wage employment by the IT sector in this period as“exogenous,” inasmuch as it was fuelled by rampant speculation.
Not only Gross Investment, but also some part of Personal Consumption, is “exogenous.”
The vigorous increase in personal consumption in the latter half of the 1990s was supported by
two factors: the wealth effect of the IT bubble (that is, the expansion of the financial assetsof households) and the increase in higher-wage employment in the Communications industry andin Computer and data processing services. This increase in employment was closely related tothe increase in fixed capital investment; indeed, they were two faces of one capital investment,
also driven by the IT bubble. Therefore, we can conclude that the economic growth of the latter
half of the 1990s was a mixture of “endogenous” and “exogenous” growth.
In the 2000s, many industries were expanding their production, and the demand that
boosted such expansion was predominantly Personal Consumption Expenditure. The
proportional contribution of Gross Investment to real GDP growth was only 4.4% in 2001-07,
whereas that of Personal Consumption Expenditure was as much as 88.7%. Even in the
manufacturing sector, the main demand in the 2000s came from Personal Consumption
Expenditure. However, the increasing employment share of higher-wage industries in the latter
half of the 1990s disappeared in the 2000s, and the trend in the labor share of real GDP
shifted from upward in 1997-2000 to downward in 2000-2006 (See Table 2 and Figure 5). The
13

average growth rate of private employee compensation in 2001-2007 (4.2%) was lower thanthat in 1991-95 (4.9%) and 1996-2000 (7.2%). Therefore, it is difficult for us to suppose that
the Personal Consumption Expenditure in this period was generated by only “endogenous
demand” of employee compensation increase. Actually, it included the “exogenous” demand of
the wealth effect of the housing bubble. The price index of housing moved upward rapidly from85.7 in 1998 to 189.9 in 2006,6 leaving the consumer price index (CPI) trend. Skyrocketing
housing prices allowed homeowners to withdraw or borrow money through home equity loans or“cash-out refinancing,” which supported their consumption expenditures. Furthermore, thesubprime housing loan increased the number of homeowners. Thus, “endogenous” Personal
Consumption Expenditure during 2001-07 was much more stagnant than before, but wascompensated by the explosion of household debt.
The top two investing industries in the 2001-07 period were Real Estate and Mining. A
large part of the gross investment in this period was generated by speculation and can be
regarded as “exogenous demand” for the following reasons. First, a considerable amount ofinvestment in Real Estate was made by households, that is, the purchase of homes. Thus,
investment in Real Estate was not capital investment aimed at increasing capacity, but was
driven by a mixture of consumption demand by households and housing-market speculation.
Second, while firms invested in Mining to increase productive capacity, this investment was
driven much more by crude oil speculation than by a quantitative increase in oil demand. This isclearly shown by the fact that the chain-type price index of oil and gas extraction increased bya factor of 10.6 between 1998 and 2007, while the nominal GDP of the same industry went up
by a factor of 5.3 during the same period. Thus, although facilities may have reachedovercapacity, the profit rate did not decrease due to skyrocketing prices.
As a result of the above circumstances, most of the growth in 2001-07 was generated
by the “exogenous demand” spurred by speculation in housing and crude oil under the stagnant
conditions prevailing after the recession of 2001. Later, this exogenous demand stimulated
more fixed capital investment in other industries, in particular, the Manufacturing andCommunications Industries after 2005, but their contributions to growth were small overall(see Figure 4). Consequently, almost of the economic growth of 2001-07 was supported byexogenous demand based on speculation and financial bubbles.
Summing up, the economic growth in the first half of the 1990s was almost entirely
endogenous, that in the latter half of the 1990s was both endogenous and exogenous (ITbubble), and that in the 2000s was mostly exogenous (speculation in crude oil and housing), as
shown in Table 4. The speculation characteristic of this period shared a common precondition,that is, so-called “excess liquidity.” In a speech in March 2005, the Fed chairman, Ben Bernanke,
mentioned the Global Saving Glut since 1996 as a cause of asset inflation in the United States. 7
Although his speech was controversial, several economists agreed that the main cause of the
bubble economy was excess liquidity. With regard to the housing bubble, there were otheradditional factors, including the proliferation of collateralized debt obligations (CDOs), credit
default swaps (CDS), excessively high asset evaluations by rating agencies, and proprietary
6 S&P/Case-Shiller U.S. National Home Price Index.
7 See Bernanke (2005).
14

trading by banks. These conditions enabled many financial investors to buy very risky
instruments, such as subprime mortgage-backed securities, in large amounts.
Table 4. Combination endogenous and exogenous factors in each periods
1991-1995
Endogenous
factors

1996-2001

A virtuous circle ofPartially a virtuous circle amongproduction, investment, andIT business, other businesses,

2001-2009(stagnation)

demand in the Manufacturing. and household.

Exogenous
factors

Partially IT bubble because of“excess liquidity” andTelecommunications Act of 1996.

Mostly boosted byspeculation in oil andhousing bubble.

2. The capital accumulation cycle of the real economy and the financial crisis of 2008
2.1 The capital accumulation cycle of the manufacturing sector in the period 19912009
Our next task is to scrutinize closely the dynamics of the Manufacturing sector’scapital investments. First, its fixed capital investment has been the biggest, the most dynamic,
and therefore the most influential among all industrial sectors since World War II (see Figure11). Second, unlike the Information or Mining industries, which have become the second biggest
investment industries, Manufacturing investment has been immune to speculation, andtherefore, its dynamism reflects the autonomous movement of its own capital accumulation.
Third, Manufacturing has a very unique feature, namely, its employment share had been
decreasing the most, in contrast to the large size of its fixed capital investment, which is oneof the main causes of growing household impoverishment. For these reasons, trends in
Manufacturing are among the most influential causes of the changing physiognomy of the U.S.
non-financial economy.
Figure 12 presents various indicators of business conditions in the manufacturingsector. All indicators were trending upward in the first half of the 1990s. In this period,
several detail industries in Manufacturing were expanding their production sequentially,
stimulating each other through intermediate and gross investment demands. Consequently,
within the Manufacturing sector, production expansion and profit increases promoted fixed
capital investment, and the latter increased demand. One might say therefore that
Manufacturing exhibited a “virtuous circle” of production, profit, investment, and demand. Atthat time, it had yet to face its limit.
Figure 11. Real f Fixed investment by industry after World War II (Billions of dollars)

15

Source: Department of Commerce, Fixed Assets AccountNote: Industries are classified by NAICS.

Figure 12. Key Indicators in the manufacturing sector

Source: Department of Commerce, GDP by industry, Fixed Asset, and Board of Governors of the Federal
Reserve System, Industrial Production and Capacity Utilization
Note: Industries are classified by SIC during 1991-2001 and NAICS during 2001-2009.

In contrast to the vigorous investment in fixed capital, paradoxically, the employment
share of the Manufacturing industry was decreasing as a result of so-called Re-engineering andOutsourcing. Re-engineering was a modified version of the Toyota Production System (leanproduction system), supplemented with IT. The implementation of the Toyota Production
System was not an easy task for U.S. firms because of their corporate culture of Taylorism,
which allocates managerial authority and job responsibilities strictly. Nevertheless, the firms
found the necessary tools to resolve this problem in IT, which enabled employees of different
job classifications, functional departments, or even firms to communicate and cooperate witheach other. The Toyota Production System included supply-chain management, which was mostly
restricted to parts production; however, the U.S. firms expanded the latter’s application to
include the whole of the production process. This was called outsourcing. Thus, Outsourcing
was an aspect of Re-engineering applied to the interactions between firms and their suppliers.
Re-engineering and Outsourcing increased labor productivity in U.S. Manufacturing firms andnarrowed the productivity gap between the U.S. and Japanese firms, but did not reverse it.
When firms cannot increase production in proportion to growth of labor productivity, they16

have to decrease their employment8.
According to Figure 12, the capacity utilization rate of the Manufacturing industry
reached its peak in 1995, and turned downward after 1997. The profit rate also began levelling
off or slightly declining in 1995. These measures indicate that excess capacity was generated in
the manufacturing industry at that time, which influenced the trend of fixed capital
investment. The inflection point of fixed capital investment in the manufacturing sector was
1995; the speed of investment turned from “rapid” to “slow,” and investment levelled off or
shifted downward slightly after 1997.
Figure 13 shows the growth rate of fixed capital (real-cost measure) in Manufacturing,that of non-financial industries, and the growth rate of the capacity of Manufacturing. These
three growth rates are closely linked to one another, but in the 1990s, the third rose muchhigher than the others. The Communications Industry and Business Services increased their
fixed capital investment in the latter half of the 1990s and contributed to the increase of the
Manufacturing sector's capacity due to the fact that the Communications Industry andBusiness Services were the top two industries supporting the Re-engineering and Outsourcing
conducted in Manufacturing. Although Manufacturing reduced the growth rate of fixed capital
investment, its excess capacity was increasingly elevated by the investments made by these
two industries.
Figure 13. Growth rate of real fixed assets and capacity

Source: Department of Commerce, Fixed Asset, and Board of Governors of the Federal Reserve System,
Industrial Production and Capacity Utilization.

As shown in Figure 13, Manufacturing sector capacity fell a great deal in the early
2000s. After this reduction, it recovered to some extent; but after levelling off throughout
the 2000s, it scarcely grew. As seen in Figure 12, the growth rate of fixed capital investment
in Manufacturing increased in 2005-07, whereas the growth rates of production (GDP) andprofit decreased. The reason for this strange phenomenon was that only a few detail industries
in Manufacturing -- particularly Computers and Electronics Products, and Oil and Coal Products-- invested a great deal, whereas many others remained stagnant. The Computers andElectronics Products industry was unique, as it benefitted from three types of demand almost
equally: Personal Consumption Expenditure, Gross Investment, and Government Expenditure.
8 On Reengineering and Outsourcing, see Lawler III, Mohrman and Ledford Jr. (1998) .
17

The Oil and Coal Products industry expanded production because of the soaring prices of crude
oil and gasoline, caused by speculation. Except for these two industries, the Manufacturingsector in general decreased its capacity in the 2000s. Thus, it is clear that the 2000s was, on
the whole, a period of stagnant investment and adjustment of excess capital.
The employment share of Manufacturing fell in the 2000s more than in the 1990s (seeTable 2), largely due to offshoring. Building large-capacity communication networks globally
under the IT bubble economy accelerated offshore production (Foreign Direct Investment) and
offshore outsourcing during the latter half of the 1990s and into the 2000s. Information
networks, which were the tools of Re-engineering and Outsourcing in the United States, werethen used to support firms globally. The large U.S. Manufacturing sector had a long experienceof offshore production and offshore outsourcing from the 1960s onward, but it accelerated its
growth rate quantitatively and became a global Re-engineering system qualitatively. As a resultof these changes, U.S. national employment in Manufacturing decreased drastically.9
The dynamic cycle of capital investment in the manufacturing industry in 1991-2009 isthus found to have four phases: 1) the activation of capital investment, 2) the generation ofexcess capital, 3) the piling up of excess capital due to decreasing but continuing investment,
and 4) the adjustment of excess capital under the impact of stagnating investment. This actual
cycle resembles closely what Marx called the “industrial cycle” in the following passages ofCapital:“The life of industry becomes a series of periods of moderate activity, prosperity, overproduction, crisis and stagnation.” (Capital, vol.I, chap.15, Sec.7, p.580)“This growing concentration leads in turn, at a certain level, to a new fall in the rate ofprofit. The mass of small fragmented capitals are thereby forced onto adventurous
paths: speculation, credit swindles, share swindles, crises.” (Capital, vol.III, chap. 15,
Sec.3, p.359)“In the period of overproduction and swindling, the productive forces are stretched totheir limit, even beyond the capitalist barriers to the production process.” ( Capital,
vol.III, chap.30, 19p.621)“But excessive importing and exporting has taken place in every county (here we are notreferring to harvest failures, etc., but rather to a general crisis); that is,overproduction, forced by credit and the accompanying general inflation in prices.”(Capital, vol.III, chap.30, p.623)“Crises are never more than momentary, violent solutions for the existing
contradictions, violent eruptions that re-establish the disturbed balance for the time
being.”(Capital, vol.III, chap.15, Sec.2, p.357) 10
In the above quotes, Marx establishes three theoretical points: 1) there is a cyclicalsequence of such phases as moderate activity, prosperity, over-production, crisis, andstagnation; 2) overproduction is accompanied with speculation, swindles, or inflation in prices;
9 On offshoring, see Gereffi (2006), Norwood, et al. (2006), UNCTAD (2013), and WTO (2014).
10 Quoted from Marx (1976) and (1981).
18

and 3) crises solve the contradictions of overproduction momentarily and violently. These threecharacteristics of the industrial cycle and its crisis phase are fully relevant in analyzing thecapital accumulation cycle over the period 1991-2009.
2.2 Two capital accumulation cycles since 1960
There were two capital accumulation cycles in the U.S. Manufacturing sector afterWorld War II. As we saw in Figure 13, the growth rates of capacity and fixed capital (Real Cost)of Manufacturing peaked in the 1960s and then again in the 1990s, although the general trend
has been for it to decline from the mid-1960s through the 2000s. On the other hand, bothrates were quite low at the end of the 1950s, in the1980s, and in the early 2000s, which werethe capacity adjustment periods at the end phase of a capital accumulation cycle. Thus, theManufacturing sector displayed the following cyclical pattern of capital accumulation:
downward toward the end of the 1950s, upward in the 1960s, moderate in the 1970s,
downward in the 1980s, upward in the 1990s, and downward in the 2000s.
Let’s examine the two cycles depicted in Figure 14, which reveals the capacity
utilization rate of the Manufacturing sector. On the one hand, when we trace the peaks of thefluctuating trend, we can find a consistently decreasing trend since 1966. On the other hand,when we trace the bottoms of the trend, we can find three, separated decreasing trends in the
periods 1952-1958, 1967-1982, and 1991-2009. The two lowest periods shown in Figure 13,
namely, one at the very end of the 1950s and the one encompassing the whole of the 1980s,
correspond to the period when the capacity utilization rate was increasing (as shown in Figure14). Consequently, we can conclude that these two periods were ones in which excess capacity
was adjusted. The manufacturing sector had two capacity adjustment periods; however, it wasincreasingly piling up excess capacity in the long run.
Figure 15 shows the trends of capacity indexes of Manufacturing industries. The detailindustries in the upper figure experienced stagnation in the 1980s, but those in the lower
figure did not. In the 1980s, many companies in such industries as those in the top figure
adjusted their overcapacity by closing factories and firing employees under the severe impact
of declining international competitiveness, increasing interest rates, and a strong dollar. Later,in the early 2000s, many companies belonging to industries presented in the lower figure also
decreased their capacity. As a result, most of the detail industries in Manufacturing have notincreased their capacity since 2001 – and did not do so until at least 2011. This was the firsttime that Manufacturing failed to increase its decade-over-decade capacity since World War II.
Figure 14. Capacity utilization of the manufacturing industry

19Source: Board of Governors of the Federal Reserve System, Industrial Production and Capacity Utilization

Figure 15. Capacity index by detail industry in the Manufacturing industry

Source: Board of Governors of the Federal Reserve System, Industrial Production and Capacity Utilization
Note: (1) Industries are classified by NAICS. (2) Capacity index = Production index(2007=100) / Capacity
utilization(%). (3) “Computer and Electronic Product” and “Apparel and Leather Goods” are excluded
because they are much different from both of above.

Figures 13, 14, and 15 indicate that the Manufacturing industry had two cycles ofcapital accumulation after 1960, in other words, it made excess capital adjustments twice.
Nevertheless, its condition of excess capacity continued to worsen from 1966 to the 2000s.
This conclusion raises the following two questions. First, why did the capital accumulation
cycles become longer than the business cycles, unlike in Marx's era? Second, why did the excess
capacity condition worsen over such a long period?

20

These two questions might have the same answer, namely government intervention inmarkets to prevent crises and boost economic growth. On the one hand, crisis prevention delays
the adjustment of excess capital. On the other hand, adding “exogenous demand” stimulates
more capital investments, and such investments will turn into excess capital after the“exogenous demand” disappears. In other words, government intervention tends to pile up
excess capital.
Government intervention was executed as a Keynesian fiscal and monetary policy fromWorld War II until the end of the 1970s, and was intensified over time from the 1950s to the1970s. After the 1980s, economic policy shifted to neo-liberalism, a doctrine that holds thatgovernment intervention in markets should be limited. However, government intervention
continued ever after the 1980s. The fiscal deficit of the U.S. federal government expanded
during that decade even more than in the Keynesian era due to the “national defense” spendingof Republican administrations, facilitating aggregate demand management. Moreover, monetaryeasing was implemented increasingly by two chairmen of the Federal Reserve Board, A.
Greenspan and B. Bernanke, and reached remarkable levels that promoted bubble economies in
the 1990s and the 2000s. Thus, national defense expenditures and bubble economies
represented the prime sources of “exogenous demand” in the neo-liberal era.
During the 1980s, overlapping adverse conditions caused financial woes for big
business in Manufacturing – consecutive severe recessions in 1980 and 1982, lagging
international competitiveness by U.S. firms, a strong dollar, and rapid increases in imports. The
neo-liberal fundamentalist monetary policy of Paul Volcker, who was chairman of the Federal
Reserve Board under both Presidents Carter and Reagan, did not involve any “monetary easing”
to alleviate these significant stresses on big business and profitability. This monetarist, highinterest rate malaise substituted for a genuine “crisis” (à la Marx).
By way of contrast, in the early 2000s, although excess capacity was considerably
reduced, government intervention, including “national defense” expenditure associated withthe wars in Afghanistan and Iraq and the monetary easing (low-interest rate regime) thatgenerated the housing bubble, interrupted the excess capital adjustment by half. The declining
capacity utilization rate prevailed throughout the 2000s (see Figure 14) and continued after
the 2008 financial crisis. The excess capacity obtained in the prior decade was cut in half foreach iteration of the business cycle, but was not adjusted enough due to persistent government
intervention. This situation in the 2000s was similar, in this regard at least, to that of the
1970s rather than to that of the 1980s.
2.3 Two bubbles in different phases of one over-arching capital accumulation cycle
By examining the capital accumulation cycle discussed above, we can clarify thedifference between the IT bubble at the end of the 1990s and the housing bubble in the 2000s.
The IT bubble occurred in the latter half of the capital accumulation cycle, a period in which
excess capacity was being generated, more and more investors were engaging in speculation,and overproduction was mounting. In this period, it was not difficult for investment bankers tofind investors and investment-grade securities, so they did not have to assume as many risks

21

for themselves; and, for this reason, the banking system was not damaged very much when the
bubble burst in 2000.
In contrast, the housing bubble occurred in the last stage of the capital accumulation
cycle, that is, the period of stagnation after recession. Government Expenditure (for theAfghan-Iraq Wars) and the bold monetary easing policy of the Fed interrupted the adjustmentof excess capital. In addition, the housing bubble initiated a new business cycle underconditions of stagnating capital investment. In the absence of rapidly growing industries andinvestment-grade securities, investment bankers had to take on huge risks in order for afinancial bubble to occur. They had to resort to CDOs from high-risk subprime mortgage-backed
securities and undertake the most risky tranche of CDOs through their own structured
investment vehicles. All this resulted in the huge credit shrinkage and systemic crisis that
occurred in 2008.11 (See Table 5.)
Table 5. Conditioning from the real economy to the bubbles
1991-1995

1996-2001

Mechanism of

Entirely

Mixture of endogenous

economic growth

Endogenousand exogenous (IT bubble)

Productive capital
investment
Industrial cycle

Activation

Over-production
and overcapacity

2001-2009
Mostly exogenous(Speculation in crude oil andhousing bubble)
Stagnation

Moderate activity → Prosperity → Over-production → Crisis → Stagnation

Target of

Securities of IT business

speculation(emerging industry)

Subprime mortgage backed
securities(high risk instruments)

In Marx's era, “moderate activity” and “prosperity” took place in the first half of theindustrial cycle, “overproduction” in the middle portion, “speculation” and “swindles” in thelatter half, and, finally, “crisis” and “stagnation” in the last phase. The 1991-2001 businesscycle was similar to such a cycle. The difference between Marx’s era and the present one can besummed up in two points. The first concerns government intervention after World War II, which
prolonged the span of the capital accumulation cycle by approximately three times. The second
concerns the process of so-called “financialization” after 1975, one that has furnished thenecessary conditions for huge bubble occurrences: derivative financial instruments,
deregulation of international finance, bold monetary easing, financial conglomerates, theshadow banking system, and so on. These two factors have enabled modern capitalism to start a
new business cycle through mechanisms of “exogenous demand,” even when excess capital is not
sufficiently decreased (or, to use Marx’s language, the slaughtering of capital values isinsufficient).
The business cycle of 2001-09 was mostly spurred by “exogenous demand,” inparticular, the housing bubble. Thus, the 2007-08 financial crisis was not a classic instance ofMarx's “overproduction crisis” even though the generation of “exogenous demand” in its lead11 For detailed discussion of the housing bubble, subprime mortgage backed securities, CDOs,
CDS, Structural Investment Vehicles, and shadow banking in the 2000s, see Roubini and Mihm
(2010) and Markham (2011).
22

up might be considered a peculiar new form of “over-production.”
Conclusion and implications
We can summarize the main points of this paper as follows.
The capitalist real economy proceeds through capital accumulation cycles: theactivation of capital investment, the generation of excess capital, recession, the stagnation ofcapital investment, and the reduction of excess capital. Marx called this the “industrial cycle.”
After World War II, government intervention and “exogenous demand” prevented or mitigatedcrises, which, on the one hand, left the adjustment of excess capital half-finished andprolonged the capital accumulation cycles. On the other hand, these counter-cyclicalmechanisms made it possible to start a new business cycle, despite the half-finished excess
capital adjustments. Consequently, the business cycle became shorter than the industrial cycle(that is to say, the capital investment cycle).
During the 1980s, several adverse conditions caused financial woes for big business.
The malaise substituted for a true crisis and reduced the massive excess capital. As a result,vigorous capital investment started in the early 1990s. However, Personal Consumption in the
middle of the 1990s was weakened by certain features of the “neo-liberal” mode of capital
accumulation, such as wage cutting, labor process intensification, and flexible employment. At
the end of the 1990s, the bubble economy boosted both Gross Investment and Personal
Consumption; this being a result of another feature of the neo-liberal mode of capital
accumulation, namely, financialization. In the 2000s, such “exogenous demands” as Government
Expenditure, speculation in crude oil, and the housing bubble started a new business cycle
under conditions of stagnation in capital investment.
It was easy for investment bankers to sell investment grade stocks (that is, IT venturebusiness stocks) during the expansion period in the latter half of the 1990s. However, it wasdifficult for them to sell high-risk instruments (that is, subprime mortgage-backed securities)
during the business stagnation period of the 2000s. As a result, investment bankers resorted
to CDOs and took big risks upon themselves. Thus, the stagnantion of the real economy in the
2000s was the background for the 2008 financial crisis.
In Marx’s era, crises were violent eruptions of, and momentary solutions for, thecontradictions of the capitalist economy. After World War II, contradictions rarely erupted in
the form of crises because of government intervention and “exogenous demand.” The typicalmanifestation of capitalism’s inherent contradictions has become a gradual trend toward
stagnation,12 due to increasing excess capital rather than to overproduction crises. At the
beginning of our era, stagnation was easily overcome through government fiscal and monetary
policies, or a bubble economy; however, the “exogenous demand” associated with thesemechanisms piles up excess capital and steadily weakens its own effects. Despite the neoliberalist genuflection to “small government,” a large expansion of budget deficits, boldmonetary easing, and intensified stagnation have become the most typical features of
12 This gradual trend was dubbed the “Great Moderation” at first, and now “Secular
Stagnation”; see Bernanke (2004) and Summer (2014).
23

contemporary capitalism.
References
Bakir, Erdogan and Al Campbell. 2010. “Neoliberalism, the Rate of Profit and the Rate of
Accumulation.” Science & Society, 74(3).
Bernanke, Ben S. 2004. “The Great Moderation.” Remarks by Governor Ben S. Bernanke, at themeetings of the Eastern Economic Association, Washington, DC, February 20, 2004.
Bernanke, Ben S. 2005. “The global saving glut and the US current account deficit.” Remarks by
Mr Ben S Bernanke, Member of the Board of Governors of the US Federal Reserve
System, at the Sandridge Lecture, Virginia Association of Economics, Richmond,
Virginia, 10 March 2005.
Blumenstein, Rebecca. 18 June 2001. “How the Fibre Barons Plunged the Nation Into a Telecom
Glut,” Wall Street Journal, Eastern edition
Brenner, Robert. 2009. “What is Good for Goldman Sachs is Good for America: The Origins of
the Current Crisis.” Center for Social Theory and Comparative History, UCLA
Duménil, Gérard and Dominique Lévy. 2012. “The Crisis of the Early 21st Century: Marxian
perspectives.” URL: http://www.jourdan.ens.fr/levy/
Gereffi, Gary. 2006. The New Offshoring of Jobs and Global Development. ILO Social Policy
Lectures 2005, ILO.
Lawler III, Edward E., Susan A. Mohrman, and Gerald E. Ledford Jr. 1998. Strategies for High

Performance Organizations –-The CEO Report: Employee Involvement, TQM, andReengineering Programs in Fortune 1000 Corporations . Jossey-Bass Publishers
Markham, Jerry W. 2011. A Financial History of the United States: From the Subprime Crisis to

the Great Recession (2006-2009). M. E. Sharpe.
Martin Fransman. 2004. “The telecoms boom and bust 1996–2003 and the role of financial
markets.” Journal of Evolutionary Economics, 14:269-406, Sprinber-Verlag
Marx, Karl. 1976 (1867). Capital: A Critique of Political Economy. Volume I. translated by Ben
Fowkes, Penguin Books——. 1978 (1885). CapitaI: A Critique of Political Economy. Volume II. translated by David
Fernbach, Penguin Books——. 1981 (1894). Capital: A Critique of Political Economy. Volume III. translated by David
Fernbach, Penguin Books
Moseley, Fred. 2011. “The U.S. Economic Crisis: Fundamental Causes and Possible Solutions.”
International Journal of Political Ecoomy, 40-3, Fall 2011
Norwood, Janet L. et al. 2006. Off-shoring: How Big is It? A Report of the Panel of the National
Academy of Public Administration for the U.S. Congress and the Bureau of Economic
Analysis, Oct.2006., Washington, D.C.
Orhangazi, Orhangazi. 2008. Financialization and the US Economy. Edward Elgar
Pearce, Lynn M., ed., 2005. Encyclopedia of American Industries, Fourth Edition, Volume 2:

Service & NonManufacturing Industries. Gale Group
Roubini, Nouriel and Stephen Mihm. 2010. Crisis Economics: A Crash Course in the Future of

Finance. The Penguin Press.

24

Smith, Murray E. G. and Jonah Butovsky. 2012. “Profitability and the Roots of the Global Crisis:Marx’s ‘Law of the Tendency of the Rate of Profit to Fall’ and the US Economy, 1950–
2007.” Historical Materialism 20.4, 2012
Sterling, Christopher H., Phyllis W. Bernt, and Matin B. H. Weiss. 2006. Shaping American

Telecommunications: A histroy of technology, policy, and economics. Lawrence Erlbaum
Associates, Publishers
Summers, Lawrence H. 2014. “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and theZero Lower Bound.” Business Economics, vol.49, No.2. National Association for BusinessEconomics.
UNCTAD. 2013. World Investment Report 2013, Global Value Chains: Investment and trade forDevelopment. United Nations Publication
WTO. 2014. World Trade Report 2014, WTO Publications
Resources
U. S. Department of Commerce. NIPA Tables——. Input-Output Accounts——. GDP by Industry——. Fixed Assets AccountU. S. Board of Governors of the Federal Reserve System. Industrial Production and Capacity
Utilization
Yahoo! Finance: http://finance.yahoo.com/
S&P/Case-Shiller U.S. National Home Price Index: http://data.okfn.org/data/core/house-pricesus
Crude Oil Price: http://ecodb.net/pcp/imf_group_oil.html#index02

25