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Finance and the Cambridge Equation: A Comment

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  • Man-Seop Park

Abstract

In a paper published in this journal, Giuseppe Ciccarone (2004) attempts to show that the Pasinetti theorem allows for the profit-making financial sector. In this effort, however, he ends up unwittingly associating the theorem with the Wicksellian monetary theory. The present note traces the origin of this uncomfortable association to his incomplete understanding of the income of financial capitalists, and demonstrates that the Pasinetti theorem is in the Post-Keynesian tradition of 'monetary analysis', in contrast to the 'real analysis' of the Wicksellian theory.

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  • Man-Seop Park, 2008. "Finance and the Cambridge Equation: A Comment," Review of Political Economy, Taylor & Francis Journals, vol. 20(3), pages 421-432.
    • Handle: RePEc:taf:revpoe:v:20:y:2008:i:3:p:421-432
    DOI: 10.1080/09538250802170442
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    References listed on IDEAS

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    1. Man-Seop Park, 2006. "The financial system and the Pasinetti theorem," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(2), pages 201-217, March.
    2. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 267-279.
    3. Pasquale Commendatore, 2002. "Inside debt, aggregate demand and the Cambridge theory of distribution: a note," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(2), pages 269-274, March.
    4. Giuseppe Ciccarone, 2004. "Finance and the Cambridge equation," Review of Political Economy, Taylor & Francis Journals, vol. 16(2), pages 163-177.
    5. L. R. Wray, 1990. "Money and Credit in Capitalist Economies," Books, Edward Elgar Publishing, number 474.
    6. Thomas I. Palley, 2002. "Financial institutions and the Cambridge theory of distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(2), pages 275-277, March.
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