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Managerial Pay (Cadrisme) and the Post Keynesian Growth Model

Author

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  • Thomas I. Palley

    (New America Foundation, Washington DC)

Abstract

This paper examines the effects of managerial pay on the Post Keynesian model of growth and distribution. Introducing managerial pay explains why economies may exhibit both wage- and profit-led characteristics in response to changed income distribution. Second, managerial pay undoes Pasinetti's (1961/2) theorem regarding the irrelevance of worker saving behavior for long run growth outcomes. Third, managerial pay links neo-classical Marxist theory with Post Keynesian growth theory. Neo-classical Marxists focus on why firms may choose inefficient production techniques. Similar logic carries over to Post Keynesian growth theory and firms may choose techniques that lower growth because they increase profits.

Suggested Citation

  • Thomas I. Palley, 2010. "Managerial Pay (Cadrisme) and the Post Keynesian Growth Model," IMK Working Paper 9-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:wpaper:9-2010
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    File URL: http://www.boeckler.de/pdf/p_imk_wp_9_2010.pdf
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    Cited by:

    1. Petra Duenhaupt, 2011. "The Impact of Financialization on Income Distribution in the USA and Germany: A Proposal for a New Adjusted Wage Share," IMK Working Paper 7-2011, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

    More about this item

    Keywords

    Post Keynesian growth theory; managerial pay; neo-classical Marxism;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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