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Inequality of Income and Wealth in the Long Run: A Kaldorian Perspective

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  • Soon Ryoo

Abstract

The paper examines the determinants of income and wealth inequality in a Kaldorian model. The approach is different from both the mainstream approach that stresses properties of production function and the Kaleckian approach that emphasizes the long†run adjustment of utilization. The analysis identifies several developments that may have increased inequality since the 1980s, including the shift of the power relation in favor of top managerial pay, the decline in the retention rate, increasing share buybacks, rising indebtedness of lower†income households and stock market booms. In contrast to Piketty's explanation, the decline in the natural growth rate reduces inequality in this Kaldorian framework.

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  • Soon Ryoo, 2016. "Inequality of Income and Wealth in the Long Run: A Kaldorian Perspective," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 429-457, May.
  • Handle: RePEc:bla:metroe:v:67:y:2016:i:2:p:429-457
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    File URL: https://doi.org/10.1111/meca.12096
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    Cited by:

    1. Soon Ryoo, 2018. "Top income shares and aggregate wealth-income ratio in a two-class corporate economy," Cambridge Journal of Economics, Oxford University Press, vol. 42(3), pages 699-728.
    2. Luca Zamparelli, 2017. "Wealth Distribution, Elasticity of Substitution and Piketty: An ‘Anti-Dual’ Pasinetti Economy," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 927-946, November.
    3. Skott, Peter, 2016. "Weaknesses of 'wage-led growth'," UMASS Amherst Economics Working Papers 2016-08, University of Massachusetts Amherst, Department of Economics.

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