ABSTRACT
Distributive-demand cycles along Goodwin’s (1967) lines show up clearly in short- to medium-run macroeconomic data for industrial economies (Barbosa-Filho and Taylor 2006). In this chapter we take up long-term oscillations in business debt and equity which may well be influenced by distributive and debt dynamics. Such cycles can be discerned in financial numbers for the US, UK, and Japan, although it is fair to say that if each cycle is interpreted as a “data point,” far from enough points are available to enable compelling statistical analysis. Evidence regarding the cycles is presented in this section using numbers obtained mostly from the Flow of Funds Accounts for these countries. The data show that equity-capital and debt-capital ratios fluctuate over wide ranges and do not sum to one. The latter observation reflects the fact that business net worth is not equal to zero in flows of funds and associated balance sheets which are based on current values of enterprise assets and “liabilities” including the value of both equity and debt.
