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Monopoly, inequality, and the economy

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  • Robert A. Blecker

Abstract

This article presents neo-Kaleckian macroeconomic models that are intended for under-graduate instruction at the introductory and intermediate levels. The neo-Kaleckian approach incorporates markup pricing, monopoly power, and income distribution into a demand-driven macro model for short-run analysis. The model is used to demonstrate the potentially stagnating effects of increased monopoly power and the more expansionary impact of tax cuts on wages compared with profits. This article also shows how a neo-Kaleckian model can be used to analyze the cases in which aggregate demand and the level of output are either ‘wage-led’ or ‘profit-led.’ For pedagogical reasons, the models are presented in a way that is parallel to how mainstream Keynesian theory is typically covered in undergraduate macro textbooks.

Suggested Citation

  • Robert A. Blecker, 2024. "Monopoly, inequality, and the economy," FMM Working Paper 111-2024, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:fmmpap:111-2024
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    References listed on IDEAS

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    7. William G. Gale & Jeffrey L. Hoopes & Kyle Pomerleau, 2024. "Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017," Journal of Economic Perspectives, American Economic Association, vol. 38(3), pages 3-32, Summer.
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    More about this item

    Keywords

    Aggregate demand; autonomous spending; multiplier; profit share; wage-led demand; profit-led demand; monopoly capitalism; markup pricing; tax cuts; Michal Kalecki; Josef Steindl; economic stagnation;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General

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