Relationship between the rate of interest and the rate of profit not have been discussed adequately in Marxist economics. It has isolated the determination of interest rate from profit rate. But, interest rate is influenced strongly by real variable, ...
Relationship between the rate of interest and the rate of profit not have been discussed adequately in Marxist economics. It has isolated the determination of interest rate from profit rate. But, interest rate is influenced strongly by real variable, such as profit rate, investment project, in real world. The aim of this article is to show how the determination of interest rate depends on real sector. Both determination of interest rate and profit rate are interdependent. This interdependency of both rate explains that real sector and monetary sector triggers economic crises simultaniously.