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: Reinterpreting the fundamental contradiction of capitalism

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  • M. J. Dávila-Fernández
  • J. L. Oreiro
  • L. F. Punzo
  • S. Bimonte

Abstract

At a theoretical level this article discusses Piketty’s hypothesis that the distribution of income and wealth tends to become more concentrated over time when the rate of return on capital is greater than the growth rate of real output. We develop a post Keynesian model of growth and distribution showing that once capital is differentiated from wealth, the increase in income and wealth concentration actually occurs when the rate of valorization of financial and real estate assets is greater than the growth rate of real output, and that this situation may be triggered by financial liberalization.

Suggested Citation

  • M. J. Dávila-Fernández & J. L. Oreiro & L. F. Punzo & S. Bimonte, 2017. ": Reinterpreting the fundamental contradiction of capitalism," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(2), pages 168-182, April.
    • Handle: RePEc:mes:postke:v:40:y:2017:i:2:p:168-182
    DOI: 10.1080/01603477.2016.1248978
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    References listed on IDEAS

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    1. Fabio Petri, 2004. "General Equilibrium, Capital and Macroeconomics," Books, Edward Elgar Publishing, number 3438.
    2. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
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    Cited by:

    1. Marwil J. Dávila-Fernández & Lionello F. Punzo, 2018. "Some New Insights on Financialisation and Income Inequality," Department of Economics University of Siena 792, Department of Economics, University of Siena.

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