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Credit money and Kaldor's 'institutional' theory of income distribution

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  • Man-Seop Park

Abstract

This paper combines two major contributions by Kaldor: the view that the supply of money, ensuing mainly from bank credit, is endogenous, and the framework which assigns a crucial role to the saving and investment behaviour of corporations in determining the general rate of profit (the neo-Pasinetti theorem). Bank loans are introduced as another means of financing investment by firms, in addition to retained profits and the new issuance of shares. The proposed model provides a convenient framework in which two different approaches in the money-endogeneity view are classified. Kaldor's neo-Pasinetti theorem is shown to hold for only one of these approaches and is then extended to include the influence of banks.

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  • Man-Seop Park, 2004. "Credit money and Kaldor's 'institutional' theory of income distribution," Review of Political Economy, Taylor & Francis Journals, vol. 16(1), pages 79-99.
    • Handle: RePEc:taf:revpoe:v:16:y:2004:i:1:p:79-99
    DOI: 10.1080/0953825032000145472
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    References listed on IDEAS

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    1. Marris, Robin, 1972. "Why Economics Needs a Theory of the Firm," Economic Journal, Royal Economic Society, vol. 82(325), pages 321-352, Supplemen.
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    6. Lavoie, Marc, 1996. "Horizontalism, Structuralism, Liquidity Preference and the Principle of Increasing Risk," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(3), pages 275-300, August.
    7. Arestis, Philip & Howells, Peter, 1996. "Theoretical Reflections on Endogenous Money: The Problem with 'Convenience Lending.'," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 20(5), pages 539-551, September.
    8. Louis-Philippe Rochon, 1999. "Credit, Money and Production," Books, Edward Elgar Publishing, number 1565.
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    Cited by:

    1. Michael ?llinger & Friedrich L. Sell, 2019. "European Economies in Light of the Keynesian cum Kaldorian Macroeconomic Distribution Theory: A Theoretical and Empirical Investigation," Review of Economics & Finance, Better Advances Press, Canada, vol. 16, pages 59-75, May.

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