Income distribution and the size of the financial sector
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.
|Date of creation:||Dec 2015|
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- 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.
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- 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.
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- 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.
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