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Income Effects Of Investments And Wages When Saving Rates Differ




Macroeconomic reasoning often postulates a uniform saving rate. Yet, this approach is only consistent with two special cases: either all households spend the same fraction of earnings or the shares in national income are held constant by assumption. Both premises lead astray. It is shown that fluctuations in investments (as a synonym for autonomous demand) generally affect distribution. In addition, the impacts of a changing wage bill on domestic product ('purchasing power argument') or profits ('wage-profit trade-off') are revealed. Copyright © 2008 The Author. Journal compilation © 2008 Blackwell Publishing Ltd and The University of Manchester.

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  • Fritz Helmedag, 2008. "Income Effects Of Investments And Wages When Saving Rates Differ," Manchester School, University of Manchester, vol. 76(6), pages 708-719, December.
  • Handle: RePEc:bla:manchs:v:76:y:2008:i:6:p:708-719

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    References listed on IDEAS

    1. Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Oxford University Press, vol. 19(6), pages 789-818, December.
    2. Heinrich Bortis, 1993. "Notes on the Cambridge Equation," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 16(1), pages 105-126, September.
    3. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," Review of Economic Studies, Oxford University Press, vol. 29(4), pages 267-279.
    4. J. E. King, 2002. "A History of Post Keynesian Economics since 1936," Books, Edward Elgar Publishing, number 2135.
    5. George A. Akerlof, 2007. "The Missing Motivation in Macroeconomics," American Economic Review, American Economic Association, vol. 97(1), pages 5-36, March.
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    Cited by:

    1. Gechert, Sebastian, 2012. "The multiplier principle, credit-money and time," MPRA Paper 34648, University Library of Munich, Germany.

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