World Profit Rates, 1960–2019

Description

ABSTRACT In this paper we present estimates of the world (net) profit rate using country-level data from the Extended Penn World Table 7.0 and estimates of the world (gross) profit rate using industry-level data from the World Input Output Database. The countryaggregated world profit rate series spans the period from 1960 to 2019, and the industry-aggregated world profit rate series runs from 2000 to 2014. The country-aggregated world profit rate series displays a strong negative linear trend for the period 1960–1980 and a weaker negative linear trend from 1980 to 2019. A medium run decomposition analysis reveals that the decline in the world profit rate is driven by a decline in the output-capital ratio. The industry-aggregated world profit rate shows a negative linear trend for the period 2000–2014, which, once again, is driven by a fall in the output-capital ratio. We have created a World Profitability Dashboard to allow researchers to freely access the world profit rate series and the underlying data at country, industry, country-group and world levels of aggregation. Abstract 1. Introduction 2. Data 2.1. The EPWT7 2.2. The SEA-WIOD 3. Construction of the World Profit Rate 3.1. Aggregating Country Data From EPWT7 3.1.1. World Profit Rate as a Weighted Average of Country Profit Rates 3.1.2. Decomposition of World Profit Rate 3.2. Aggregating Country-Industry Data from SEA-WIOD 4. Country-Level Profit Rates: Trends in World Profitability 4.1. World Profitability Using All Observations 4.2. World Profitability Using A Balanced Panel Data Set 5. Industry-Level Profit Rates: Trends in World Profitability 6. The World Profitability Dashboard 7. Conclusion Disclosure statement References