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The Correlates of Rentier Returns in OECD Countries


  • Gerald Epstein
  • Arjun Jayadev


This paper examines the correlates of rentier returns – returns to the ownership of financial assets – in a sample of OECD countries between 1960 and 2000. The authors develop a simple bargaining model among three classes – industrial capitalists, rentiers and workers – and show that rentier income returns increase when domestic and foreign real interest rates rise, costs of capital mobility fall, and the power of labor declines. Using an unbalanced panel dataset, the paper also econometrically investigates the impacts of proxies for these variables on rentier incomes. The authors find that interest rate liberalization, reductions in the unionization rate of labor, and increased returns from foreign financial investments increase rentier returns. These results provide support both for the simple model and for common Post-Keynesian and Marxian stories of the impact of financialization and neo-liberal policy changes on income shares.

Suggested Citation

  • Gerald Epstein & Arjun Jayadev, 2007. "The Correlates of Rentier Returns in OECD Countries," Working Papers wp123, Political Economy Research Institute, University of Massachusetts at Amherst.
  • Handle: RePEc:uma:periwp:wp123

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    References listed on IDEAS

    1. Bellon, Mauricio R. & Adato, Michelle & Becerril, Javier & Mindek, Dubravka, 2006. "Poor farmers' perceived benefits from different types of maize germplasm: The case of creolization in lowland tropical Mexico," World Development, Elsevier, vol. 34(1), pages 113-129, January.
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    3. Smale, Melinda & Bellon, Mauricio R & Aguirre Gomez, Jose Alfonso, 2001. "Maize Diversity, Variety Attributes, and Farmers' Choices in Southeastern Guanajuato, Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 50(1), pages 201-225, October.
    4. Elizabeth Fitting, 2006. "Importing Corn, Exporting Labor: The Neoliberal Corn Regime, GMOs, and the Erosion of Mexican Biodiversity," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 23(1), pages 15-26, March.
    5. Van Dusen, M. Eric & Taylor, J. Edward, 2005. "Missing markets and crop diversity: evidence from Mexico," Environment and Development Economics, Cambridge University Press, vol. 10(04), pages 513-531, August.
    6. Gomez, Jose Alfonso Aguirre & Bellon, Mauricio R. & Smale, Melinda, 1998. "A Regional Analysis of Maize Biological Diversity in Southeastern Guanajuato, Mexico," Economics Working Papers 7671, CIMMYT: International Maize and Wheat Improvement Center.
    7. Filmer, Deon*Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
    8. Hammer, Jeffrey S., 1986. "Subsistence first farm allocation decisions in senegal," Journal of Development Economics, Elsevier, vol. 23(2), pages 355-369, October.
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    10. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March.
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    Cited by:

    1. Luciano BOGGIO & Vincenzo DALL’AGLIO & Marco MAGNANI, 2010. "On Labour Shares in Recent Decades: A Survey," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 118(3), pages 283-333.
    2. Peter Skott, 2013. "Increasing Inequality and Financial Instability," Review of Radical Political Economics, Union for Radical Political Economics, vol. 45(4), pages 478-488, December.
    3. Peter Skott, 2011. "Heterodox macro after the crisis," UMASS Amherst Economics Working Papers 2011-23, University of Massachusetts Amherst, Department of Economics.
    4. Thomas I. Palley, 2007. "Financialization: What It Is and Why It Matters," Economics Working Paper Archive wp_525, Levy Economics Institute.
    5. Szabolcs Szikszai & Tamas Badics, 2014. "Enhanced Funds Seeking Higher Returns," Working papers wpaper43, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item


    Rentier; Functional Distribution; Neoliberalism; Financialization;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)


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