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Financialization, Distribution and Accumulation: A Circuit of Capital Model with A Managerial Class

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  • Ramaa Vasudevan

Abstract

This paper explores some implications of financialization and rising consumer debt on the interplay of inequality and growth in a circuit of capital model, which includes a managerial class. Two possible ‘closures’ are presented in the paper. With the Classical†Marxian closure, credit (specifically consumer credit) endogenously adjusts to the pace of accumulation. With the alternative Keynesian closure, exogenous consumer credit determines the rate of steady†state growth. Two regimes of accumulation are identified on the basis of these two closures. Accumulation is constrained by profitability in the first regime and increasing inequality in the second regime. The paper also investigates the impact of rising managerial income on demand and accumulation. The managerial class plays a dual role in the capitalist economy increasing productivity on one hand and diverting a share of surplus from investment to consumption on the other.

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  • Ramaa Vasudevan, 2016. "Financialization, Distribution and Accumulation: A Circuit of Capital Model with A Managerial Class," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 397-428, May.
    • Handle: RePEc:bla:metroe:v:67:y:2016:i:2:p:397-428
    DOI: 10.1111/meca.12106
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    Cited by:

    1. Dögüs, Ilhan, 2017. "Rising wage dispersion between white-collar and blue-collar workers and market concentration: The case of the USA, 1966-2011," ZÖSS-Discussion Papers 62, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    2. Stephen Thompson, 2018. "Employment and fiscal policy in a Marxian model," Metroeconomica, Wiley Blackwell, vol. 69(4), pages 820-846, November.
    3. Amitava Krishna Dutt, 2017. "Heterodox Theories Of Economic Growth And Income Distribution: A Partial Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1240-1271, December.
    4. Alex Izurieta & Pierre Kohler & Juan Pizarro, 2018. "Financialization, Trade, and Investment Agreements: Through the Looking Glass or Through the Realities of Income Distribution and Government Policy?," GDAE Working Papers 18-02, GDAE, Tufts University.
    5. Adem Yavuz Elveren & Sara Hsu, 2018. "The Effect of Military Expenditure on Profit Rates: Evidence from Major Countries," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 75-94, December.
    6. Dögüs, Ilhan, 2021. "Financialisation and market concentration in the USA: A monetary circuit theory," ZÖSS-Discussion Papers 87, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    7. Elveren Adem Yavuz & Taşıran Ali Cevat, 2021. "Soft Modeling of Military Expenditure, Income Inequality, and Profit Rate, 1988–2008," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 27(3), pages 405-430, September.

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