Abstract
ABSTRACT Kaleckian literature is considered an important theme in the post-Keynesian school of economic thought. In the aftermath of the financial crisis, the endeavors of forming a new consensus regarding essential economic issues, in particular achieving economic growth became a need. Thus, the Kaleckian models returned to be in the spot since these models tackle the impact of changes in the distribution of income and address the question whether a redistribution of income away from wages and towards profits is capable of boosting growth. In this sense, this paper return to Kaleckian insights and offers a theoretical discussion of the distributional effects on aggregate demand and economic growth. Moreover, through the lens of neo-Kaleckian tradition, the evolution of the debate on wage-led and profit-led regimes in recent decades can be traced.
Highlights
Among the most challenging questions in economics are those related to economic growth and income distribution
These issues have been a major concern for economic theories, there is no clear conventional vision, or even alternative one, that provides much help in understanding many aspects related to the issues of income distribution and economic growth, and the relationship among them
Much of early literature relied on the contributions of classical economists as a starting point for developing the debate on aspects of economic growth and income distribution, these contributions were subsequently neutralized in the aftermath of the marginalist revolution in the late nineteenth century, at the expense of the focus on exchange, resource allocation, and price determination
Summary
Among the most challenging questions in economics are those related to economic growth and income distribution. As Stiglitz (2016) points out, is the belief that economic growth will benefit all sections of society, or what has become commonly referred to in political and economic contexts by saying that “a rising tide lifts all boats” This idea was translated through strategies that seek to promote the concentration of wealth in the hands of the wealthy classes, arguing that this will motivate entrepreneurs to invest more, leading to higher employment rates and bringing the benefit for the working class. 782-796 al (2019: 964) “the opening of domestic financial markets for foreign capital contributed to an erosion of the wage share” These changes in income distribution, as Stockhammer (2015) reported, led to the wage shares in United states to a decline of 5 percentage points and even more in the European countries that fell by about 10 percentage points.
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