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Modeling Distribution and Growth: Replies to Garbellini and Wirkierman, Harcourt, and Nell

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  • Lance Taylor

Abstract

Income sources and uses are examined for the top 1% and lower 99% of the US size distribution-the groups are proxies for “capitalists” and “workers.” Large flows—notably proprietors’ incomes at the top and fiscal transfers at the bottom—cannot easily be assigned to capital or labor. Financial payments (interest and dividends) are concentrated at the top. Capital gains are similarly concentrated and comparable in magnitude. Together with financial flows they exceed business profits net of depreciation. Cumulating these flows over time is consistent with the empirical observation that the valuation ratio for the US corporate sector is greater than one. The richer group has positive savings; they are negative for the bottom 99% overall (especially below the Bdh percentile of the size distribution). These observations suggest that the US economy is not at a steady state. The nature of shifts in income and wealth distributions needed to support changes in steady states is discussed in light of the comments in this symposium.

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  • Lance Taylor, 2014. "Modeling Distribution and Growth: Replies to Garbellini and Wirkierman, Harcourt, and Nell," International Journal of Political Economy, Taylor & Francis Journals, vol. 43(3), pages 44-54, July.
    • Handle: RePEc:mes:ijpoec:v:43:y:2014:i:3:p:44-54
    DOI: 10.1080/08911916.2014.1002299
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    1. Edward N. Wolff, 2012. "The Asset Price Meltdown and the Wealth of the Middle Class," NBER Working Papers 18559, National Bureau of Economic Research, Inc.
    2. Lance Taylor & Armon Rezai & Rishabh Kumar & Nelson Barbosa & Laura Carvalho, 2017. "Wage increases, transfers, and the socially determined income distribution in the USA," Review of Keynesian Economics, Edward Elgar Publishing, vol. 5(2), pages 259-275, April.
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    Cited by:

    1. Stephen Thompson, 2022. "“The total movement of this disorder is its order”: Investment and utilization dynamics in long‐run disequilibrium," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 638-682, May.

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