IDEAS home Printed from
   My bibliography  Save this article

Inside debt, aggregate demand and the Cambridge theory of distribution: a note


  • Pasquale Commendatore


Palley (1996. Inside debt, aggregate demand, and the Cambridge theory of distribution, Cambridge Journal of Economics , vol. 20, 465--74) argues that, when inside debt is taken into account, the Pasinetti theorem does not apply. Palley's conclusion, however, derives from a mis-specification of the steady growth equilibrium condition, according to which capitalists' accumulation of wealth equals their saving. In this note, Palley's mis-specification is corrected and it is shown that, when the rate of profits is equal to the rate of return on debt obligations, the Pasinetti theorem still holds. Furthermore, the range of validity of the dual theorem of Meade (1963. The Rate of profit in a growing economy, Economic Journal , vol. 73, no. 292, 665--74) and Samuelson and Modigliani (1966. The Pasinetti paradox in neoclassical and more general models, Review of Economic Studies , vol. 33, no. 4, 269--302) is severely reduced. Copyright 2002, Oxford University Press.

Suggested Citation

  • Pasquale Commendatore, 2002. "Inside debt, aggregate demand and the Cambridge theory of distribution: a note," Cambridge Journal of Economics, Oxford University Press, vol. 26(2), pages 269-274, March.
  • Handle: RePEc:oup:cambje:v:26:y:2002:i:2:p:269-274

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:26:y:2002:i:2:p:269-274. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.