A Note on Credit Allocation, Income Distribution, and the Circuit of Capital
AbstractThis note considers the relationship between credit allocation and the aggregate, class distribution of income in the Circuit of Capital. Production and consumption credit inject means of purchase in different locations in the monetary circuits of capitalist reproduction. On the basis of comparative-dynamic analysis of the properties of steady-state evolutions, the note shows that production credit increases the wage share in total income, while consumption credit increases profit shares. These findings hold in general for any evolution in which sectoral revenue-elasticities of outlays measure less than unity. The note also motivates a new endogenous approach to the aggregate distribution of income, and offers new analytical tools facilitating work based on demand-constrained models of the Circuit of Capital.
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Bibliographic InfoPaper provided by Department of Economics, SOAS, University of London, UK in its series Working Papers with number 181.
Length: 28 pages
Date of creation: Apr 2013
Date of revision:
Credit and Income Distribution; Circuit of Capital; Marxian Analyses;
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- Foley, Duncan K., 1982. "Realization and accumulation in a Marxian model of the circuit of capital," Journal of Economic Theory, Elsevier, vol. 28(2), pages 300-319, December.
- Matteo Iacoviello, 2006.
"Household Debt and Income Inequality, 1963-2003,"
2006 Meeting Papers
585, Society for Economic Dynamics.
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