PROFIT AND ECONOMIC GROWTH
Vyacheslav V. Dementyev
Doct. Sci. (Econ.), Professor, Financial University under the Government of the Russian Federation, Moscow, Russia
Doct. Sci. (Econ.), Professor, Financial University under the Government of the Russian Federation, Moscow, Russia
Aleksandr P. Scherbakov
, Financial University under the Government of the Russian Federation, Moscow, Russia
, Financial University under the Government of the Russian Federation, Moscow, Russia
TERRA ECONOMICUS, 2017, Vol. 15 (no. 3),
This article analyzes the profits, as one of the main factors of economic growth. It is shown that the owner’s motivation to actions aimed at economic growth is an opportunity to make a profit. The lack of profit or its limitations in space and time, as well as limited opportunities to increase profit, result in the lack of motivation to do business, to invest and expand production, as well as in the lack of resources for private investment and the reduction of budget revenues. The central subject of discussion on economic growth, according to the author, should be, above all, the discussion of possible models and directions of maximizing profit. It is shown that the source of economic profit is the inequality between different firms, both within the country and between firms belonging to different national economies. Inequality creates advantages, which are realized as profits. Depending on what are the advantages of the company, the different models of creating profit are marked out. It is shown that each model generates its own profit accumulation regime (creation, distribution, storage and use of profits). Since the models considered play a different role in creating aggregate profits in the national economy, one can speak of the dominant model (models) of creating profit in the national economy. In order to manage economic growth, it is necessary to influence, first, the choice by entrepreneurs of profit maximization models and, secondly, the average profit rate in the national economy. The basis of economic policy (macro-economic, institutional), focused on economic growth, should be a policy of creating macro-economic and institutional conditions for improving the profitability of the national economy.
Keywords: economic growth; profit; rate of profit; economic policy; institutional capital
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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606
Founder: Southern Federal University
ISSN: 2073-6606