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Wealth and wealth distribution in the neo-Kaleckian growth model

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  • Thomas Palley

Abstract

This paper explores the implications of wealth distribution for neo-Kaleckian growth theory. Incorporating wealth distribution as an endogenous variable provides a theoretical framework that unifies Cambridge, neo-Ricardian, and neo-Kaleckian growth theory. The model expands on Dutt (1990) by introducing a richer description of capital accumulation and a consumption wealth effect. This introduces concerns regarding wage- and profit-led economies that change the comparative static properties. In addition, the paper introduces managerial pay, multiple asset classes, and multiple classes of wealth holders. Introducing managerial pay undoes Pasinetti's (1962) theorem regarding the irrelevance of worker saving behavior for income distribution and growth.

Suggested Citation

  • Thomas Palley, 2012. "Wealth and wealth distribution in the neo-Kaleckian growth model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 453-474.
    • Handle: RePEc:mes:postke:v:34:y:2012:i:3:p:453-474
    DOI: 10.2753/PKE0160-3477340304
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    Cited by:

    1. Setterfield, Mark & Kim, Yun K., 2016. "Debt servicing, aggregate consumption, and growth," Structural Change and Economic Dynamics, Elsevier, vol. 36(C), pages 22-33.
    2. Soon Ryoo, 2016. "Inequality of Income and Wealth in the Long Run: A Kaldorian Perspective," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 429-457, May.
    3. Mark Setterfield & Yun K. Kim & Jeremy Rees, 2016. "Inequality, Debt Servicing and the Sustainability of Steady State Growth," Review of Political Economy, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    4. Kemp-Benedict, Eric, 2015. "New ways to slice the pie: Span of control and wage and salary distribution within firms," MPRA Paper 77072, University Library of Munich, Germany, revised 24 Feb 2017.
    5. Hanna Karolina Szymborska, 2022. "Rethinking inequality in the 21st century – inequality and household balance sheet composition in financialized economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(1), pages 24-72, January.
    6. Mark Setterfield & Yun K. Kim, 2016. "Household Borrowing and the Possibility of ``Consumption-Driven, Profit-Led Growth’’," Working Papers 2016_01, University of Massachusetts Boston, Economics Department.
    7. Yun K. Kim & Mark Setterfield & Yuan Mei, 2014. "A theory of aggregate consumption," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 11(1), pages 31-49, April.
    8. Mark Setterfield & Yun K. Kim, 2017. "Household borrowing and the possibility of 'consumption-driven, profit-led growth'," Review of Keynesian Economics, Edward Elgar Publishing, vol. 5(1), pages 43-60, January.
    9. Rishabh Kumar, 2015. "Wealth accumulation and aggregate demand stagnation in a two class economy with applications to the United States," Working Papers 1526, New School for Social Research, Department of Economics.
    10. Maciej Holko, 2017. "Oszczędności pracowników, rozwój rynku kapitału i inwestycje zagraniczne - rządowy plan rozwoju z perspektywy postkeynesowskiej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5, pages 5-30.
    11. Kemp-Benedict, Eric, 2015. "A middle-manager model of wage and salary distribution within firms," MPRA Paper 64303, University Library of Munich, Germany.
    12. Arslan Razmi, 2018. "Does the demand regime matter over the medium run? Revisiting distributional issues in a portfolio framework under different exchange rate regimes," Metroeconomica, Wiley Blackwell, vol. 69(4), pages 708-736, November.
    13. Köhler, Kasper, 2018. "The limits to profit-wage redistribution: Endogenous regime shifts in Kaleckian models of growth and distribution," IPE Working Papers 112/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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