IDEAS home Printed from https://ideas.repec.org/a/taf/revpoe/v32y2020i4p615-639.html
   My bibliography  Save this article

Personal Income Distribution and Progressive Taxation in a Neo-Kaleckian Model: Insights from the Italian Case

Author

Listed:
  • Maria Cristina Barbieri Góes

Abstract

This paper develops a stylized short-run neo-Kaleckian model incorporating personal income inequality and income taxes. The main goal is to investigate how changes in income taxes and personal income distribution affect output growth. The theoretical discussion of the stylized model is then empirically assessed using data for Italy retrieved from the Survey of Household Income and Wealth published by the Bank of Italy. The empirical analysis confirms both the heterogeneity of the propensities to consume of Italian households and the dominance of absolute income effects in the Italian consumer behavior that assures the negative trade-off between inequality and aggregate demand. More specifically, it is shown that, overall, Italians are still income constrained, not allowing for a compensation of the demand-depressing effects of raising inequality via debt and wealth-based consumption. Likewise, it is argued that decreasing personal income inequality via progressive income tax reforms would have positive effects on aggregate demand, utilization, and growth.

Suggested Citation

  • Maria Cristina Barbieri Góes, 2020. "Personal Income Distribution and Progressive Taxation in a Neo-Kaleckian Model: Insights from the Italian Case," Review of Political Economy, Taylor & Francis Journals, vol. 32(4), pages 615-639, October.
    • Handle: RePEc:taf:revpoe:v:32:y:2020:i:4:p:615-639
    DOI: 10.1080/09538259.2020.1821999
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09538259.2020.1821999
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09538259.2020.1821999?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ettore Gallo, 2023. "How Short Is the Short Run in the Neo-Kaleckian Growth Model?," Review of Political Economy, Taylor & Francis Journals, vol. 35(3), pages 687-701, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:taf:revpoe:v:32:y:2020:i:4:p:615-639. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRPE20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.