The Theory of Prices and Income Distribution

Abstract

In chapter 2 we argued that in Kalecki’s theory output and employment depend on capitalist expenditure, and on the distribution of income; and more precisely on the share of profits in the national income. We will now present Kalecki’s theory of income distribution, which is closely related to his theory of price determination. The latter, in turn, is related to his view that modern capitalism is characterized by market imperfections, both on the labour market and product market. By focusing on these imperfections, Kalecki took into account two important differences between perfect and imperfect competition.KeywordsIncome DistributionReal WageCapitalist ExpenditureDemand CurveAggregate DemandThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.