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On a Neo‐Classical Analysis of the Keynesian Income Distribution Theory
Author(s) -
LAING N. F.
Publication year - 1980
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1980.tb01653.x
Subject(s) - economics , investment (military) , distribution (mathematics) , income distribution , mechanism (biology) , class (philosophy) , keynesian economics , neoclassical economics , post keynesian economics , element (criminal law) , macroeconomics , mathematical economics , physics , mathematics , law , quantum mechanics , inequality , mathematical analysis , artificial intelligence , politics , political science , computer science
The Keynesian element of Kaldor's distribution theory was that ‘investment is determined independetly of current savings’. It is argued here that this propsition is true of neo‐classical economic analysis which takes any account of expectations. The Kaldorian mechanism. therefore, also operates in this class of models. This is illustrated by showing the effect in a neo‐classical model of an improvement in investment opportunities in redistributing income from low to high savers. It is argued inter alia ( a) that there is no question of a need to reconcile neo‐classical and neo‐Keynesian income distribution theories(b) that the neo‐classical analysis put forward is essentially ex post and therefore serves to isolate mechanism and make relative predictions.