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An introduction to the distributional role of bank credit to workers in a surplus approach framework

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  • Riccardo Zolea

Abstract

The Classics and Marx, but also more recent contributions inspired by them, assume that the interest rate is a part of the profit rate. Over time, however, credit towards consumption and for the purchase of housing by workers has taken on greater and greater economic weight. This paper therefore aims to study this issue from a theoretical point of view, analysing its premises and implications. After investigating the necessary conditions on both the demand side (workers) and the supply side (banks), an attempt is made to analyse the distributional effects of a change in the interest rate. The results appear rather complex and difficult to interpret, suggesting a certain difficulty in identifying a simple dynamic that can be generalised to any economic context.

Suggested Citation

  • Riccardo Zolea, 2024. "An introduction to the distributional role of bank credit to workers in a surplus approach framework," Working Papers PKWP2403, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp2403
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    surplus approach; interest rate; mortgage;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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