ABSTRACT
This chapter aims to capture the main hypotheses and stylized facts proposed by Edward J. Nell regarding the relations among the rate of profit, the rate of interest, and the rate of growth of output. It shows whether the stylized facts proposed by Nell can be verified by modern time-series techniques involving the use of American and Canadian observations pertaining to the last half-century. Nell maintains that the normal rate of profit determines the long-period rate of interest, and argues that there is a Golden Rule mechanism which concomitantly moves all three main rates: the rate of accumulation, the normal and the realized rates of profit, and the rate of interest. Nell points out that the rate of interest and the rate of growth must closely track one another in the long run. The Golden Rule implying a long-term relation between the rate of interest and rate of growth has been the subject of significant controversy.
