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Inequality of Income and Wealth in the Long Run: A Kaldorian Perspective
Author(s) -
Ryoo Soon
Publication year - 2016
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12096
Subject(s) - economics , inequality , boom , stock (firearms) , mainstream , labour economics , economic inequality , perspective (graphical) , income distribution , monetary economics , mechanical engineering , mathematical analysis , philosophy , mathematics , theology , environmental engineering , engineering , artificial intelligence , computer science
The paper examines the determinants of income and wealth inequality in a Kaldorian model. The approach is different from both the mainstream approach that stresses properties of production function and the Kaleckian approach that emphasizes the long‐run adjustment of utilization. The analysis identifies several developments that may have increased inequality since the 1980s, including the shift of the power relation in favor of top managerial pay, the decline in the retention rate, increasing share buybacks, rising indebtedness of lower‐income households and stock market booms. In contrast to Piketty's explanation, the decline in the natural growth rate reduces inequality in this Kaldorian framework.