Money and distribution: can the theory explain recent empirical trends?
AbstractThe paper examines some trends in the distribution of income that have prevailed in thelast two decades, in particular the opposite tendencies to a fall in the wage share and an�increase in the profit and rent share. Moreover both profit rates and real interest rates have�increased in OECD countries. Some theoretical models are examined to see whether they�may explain those tendencies. The focus is on models in the Keynesian-Kaleckian tradition.�In those models it is possible, for some combinations of parameters, that an increase�in real interest rates may lead to an increase in profit rates. Unfortunately, however, those�values of parameters which would be required and which correspond to assumptions on the�� behaviour of agents, do not reflect historical values. Thus, though Kaleckian-Keynesian�models may offer an explanation of these trends, this explanation does not seem to apply�� to the recent history of OECD countries. Another strand of literature is also examined�which goes back to Sraffa and the monetary theory of distribution. The two approaches�are compared. The paper also looks for the possibility of a synthesis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Macerata University, Department of Finance and Economic Sciences in its series Working Papers with number 31-2006.
Date of creation: Oct 2006
Date of revision: Oct 2008
rate of profit; Distribution theory; Monetary theory;
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lavoie, M., 1993.
"Interest Rates in Post-Keynesian Models of Growth and Distribution,"
9314e, University of Ottawa, Department of Economics.
- Marc Lavoie, 1995. "Interest Rates In Post-Keynesian Models Of Growth And Distribution," Metroeconomica, Wiley Blackwell, vol. 46(2), pages 146-177, 06.
- Harrison, Ann, 2005. "Has Globalization Eroded Labor’s Share? Some Cross-Country Evidence," MPRA Paper 39649, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvana Tartufoli).
If references are entirely missing, you can add them using this form.