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Finance and distribution

Author

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  • Ramaa Vasudevan

    (Department of Economics, Colorado State University, Fort Collins, CO, USA)

Abstract

This paper investigates this interaction of demand and distributional dynamics, in the context of the rise to dominance of finance and the associated phenomenon of 'financialization.' The phenomenon has involved on the one hand an increasing recourse to debt in order to finance consumption, and on the other rising claims of shareholders on the profits of corporations along with a transformation of the orientation of corporations towards financial returns. We present two versions of the basic post-Keynesian model in order to address the implications of a dominant shareholder class and rising debt-driven consumption on demand. We distinguish two demand regimes, finance-led and finance-burdened, and investigate the interaction of demand and distribution in these regimes.

Suggested Citation

  • Ramaa Vasudevan, 2017. "Finance and distribution," Review of Keynesian Economics, Edward Elgar Publishing, vol. 5(1), pages 78-93, January.
    • Handle: RePEc:elg:rokejn:v:5:y:2017:i:1:p78-93
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    Citations

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    Cited by:

    1. Cem Oyvat & Oğuz Öztunalı & Ceyhun Elgin, 2020. "Wage‐led versus profit‐led demand: A comprehensive empirical analysis," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 458-486, July.
    2. Eckhard Hein, 2017. "Post-Keynesian macroeconomics since the mid 1990s: main developments," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 131-172, September.
    3. Oyvat, Cem & Öztunalı, Oğuz & Elgin, Ceyhun, 2018. "Wage-led vs. profit-led growth: a comprehensive empirical analysis," Greenwich Papers in Political Economy 20951, University of Greenwich, Greenwich Political Economy Research Centre.

    More about this item

    Keywords

    distribution; finance; post-Keynesian;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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