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Income distribution and the size of the financial sector

Listed author(s):
  • Panico, Carlo

    ()

    (Università degli Studi di Napoli "Federico II" (Federico II University of Naples))

  • Pinto, Antonio

    ()

    (Università degli Studi di Napoli "Federico II" (Federico II University of Naples))

Registered author(s):

    The paper deals with the influence of the size of financial industry on income distribution. In opposition to Piketty’s position, it argues that the wage share is influenced by changes in the size of the sectors of the economy, by the input composition of the productive structure and by the ability of the workers to capture the increases in productivity. The process of financialization experienced in the recent decades has affected these three elements. Among other things, it has enhanced the ability of the banking industry to affect the formation of monetary policy and legislation, which in turn can have had some bearing on the workers’ ability to appropriate the increases in productivity. After describing Piketty’s interpretation of the rise in inequality and discuss his views on the theories of distribution, the paper illustrates different representations of the financial sector proposed by the literature, underlining the relevance of considering this sector as an industry. By following these lines the pa-per describes how an enlarged size of the banking industry can increase inequality.

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    File URL: http://www.centrosraffa.org/public/578e8e62-7b03-4810-8021-4b33a74db71b.pdf
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    Paper provided by Centro di Ricerche e Documentazione "Piero Sraffa" in its series Centro Sraffa Working Papers with number CSWP15.

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    Length: 22 pages
    Date of creation: Dec 2015
    Handle: RePEc:ris:sraffa:0015
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    1. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 1-41.
    2. Palma, J.G., 2009. "The Revenge of the Market on the Rentiers: Why neo-liberal Reports of the end of history turned out to be premature (Updated 19 December 2011)," Cambridge Working Papers in Economics 0927, Faculty of Economics, University of Cambridge.
    3. Marc Lavoie, 2008. "Financialisation Issues in a Post-Keynesian Stock-flow Consistent Model," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 5(2), pages 331-356.
    4. Paul A. Samuelson, 1966. "A Summing Up," The Quarterly Journal of Economics, Oxford University Press, vol. 80(4), pages 568-583.
    5. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-393, December.
    6. Till van Treeck, 2009. "A synthetic, stock--flow consistent macroeconomic model of 'financialisation'," Cambridge Journal of Economics, Oxford University Press, vol. 33(3), pages 467-493, May.
    7. Amitava Krishna Dutt, 2006. "Maturity, Stagnation And Consumer Debt: A Steindlian Approach," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 339-364, 07.
    8. Eckhard Hein, 2010. "Shareholder Value Orientation, Distribution And Growth-Short- And Medium-Run Effects In A Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 61(2), pages 302-332, 05.
    9. Carlo Panico & Antonio Pinto & Martín Puchet Anyul, 2012. "Income distribution and the size of the financial sector: a Sraffian analysis," Cambridge Journal of Economics, Oxford University Press, vol. 36(6), pages 1455-1477.
    10. Engelbert Stockhammer, 2006. "Shareholder value orientation and the investment-profit puzzle," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 28(2), pages 193-215, January.
    11. Panico, Carlo, 1980. "Marx's Analysis of the Relationship between the Rate of Interest and the Rate of Profits," Cambridge Journal of Economics, Oxford University Press, vol. 4(4), pages 363-378, December.
    12. Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 113-137, January.
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