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Wealth and wealth distribution in the neo-Kaleckian growth model

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  • Thomas Palley

Abstract

This paper explores the implications of wealth distribution for neo-Kaleckian growth theory. Incorporating wealth distribution as an endogenous variable provides a theoretical framework that unifies Cambridge, neo-Ricardian, and neo-Kaleckian growth theory. The model expands on Dutt (1990) by introducing a richer description of capital accumulation and a consumption wealth effect. This introduces concerns regarding wage- and profit-led economies that change the comparative static properties. In addition, the paper introduces managerial pay, multiple asset classes, and multiple classes of wealth holders. Introducing managerial pay undoes Pasinetti's (1962) theorem regarding the irrelevance of worker saving behavior for income distribution and growth.

Suggested Citation

  • Thomas Palley, 2012. "Wealth and wealth distribution in the neo-Kaleckian growth model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 453-474.
  • Handle: RePEc:mes:postke:v:34:y:2012:i:3:p:453-474
    DOI: 10.2753/PKE0160-3477340304
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    File URL: http://hdl.handle.net/10.2753/PKE0160-3477340304
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    Citations

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    Cited by:

    1. Setterfield, Mark & Kim, Yun K., 2016. "Debt servicing, aggregate consumption, and growth," Structural Change and Economic Dynamics, Elsevier, vol. 36(C), pages 22-33.
    2. 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.
    3. Mark Setterfield & Yun K. Kim & Jeremy Rees, 2016. "Inequality, Debt Servicing and the Sustainability of Steady State Growth," Review of Political Economy, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    4. Kemp-Benedict, Eric, 2015. "New ways to slice the pie: Span of control and wage and salary distribution within firms," MPRA Paper 77072, University Library of Munich, Germany, revised 24 Feb 2017.
    5. Mark Setterfield & Yun K. Kim, 2016. "Household Borrowing and the Possibility of ``Consumption-Driven, Profit-Led Growth’’," Working Papers 2016_01, University of Massachusetts Boston, Economics Department.
    6. Yun K. Kim & Mark Setterfield & Yuan Mei, 2014. "A theory of aggregate consumption," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 11(1), pages 31-49, April.
    7. Rishabh Kumar, 2015. "Wealth accumulation and aggregate demand stagnation in a two class economy with applications to the United States," Working Papers 1526, New School for Social Research, Department of Economics.
    8. Mark Setterfield & Yun K. Kim, "undated". "Household Borrowing and the Possibility of “Consumption- Driven, Profit-Led Growthâ€," Working Papers Series 39, Institute for New Economic Thinking.
    9. repec:sgh:gosnar:y:2017:i:5:p:5-30 is not listed on IDEAS
    10. Kemp-Benedict, Eric, 2015. "A middle-manager model of wage and salary distribution within firms," MPRA Paper 64303, University Library of Munich, Germany.

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