Emulation, indebtedness and income distribution: A monetary theory of production approach
AbstractThe aim of this paper is to study the effect of emulation within a basic schema of the monetary theory of production (MTP). A theoretical model is presented, where workers set their target level of consumption based on the comparison with other workers taken as reference. It is shown that emulation can play a crucial role in increasing workersâ€™ propensity to indebtedness. As a result, profits increase and so does the price level, thus generating a decline of the real wage. Moreover, the existence of indebtedness can provide a further solution to the socalled Â»paradox of profitsÂ« within the MTP.
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Bibliographic InfoArticle provided by Edward Elgar in its journal Intervention.
Volume (Year): 7 (2010)
Issue (Month): 1 ()
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Web page: http://www.elgaronline.com/ejeep
monetary circuit; emulation; indebtedness; profits; wages;
Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- Forges Davanzati, Guglielmo & Pacella, Andrea, 2013. "The profits-investments puzzle: A Post Keynesian-Institutional interpretation," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 1-13.
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