Inequality, Growth and ‘Hot’ Money
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Inequality, Growth and ‘Hot’ Money

  • New Directions in Post-Keynesian Economics series

Pablo G. Bortz

The growing levels of income inequality, an explosion of global financial flows, and a worldwide decline of economic growth have combined to challenge accepted economic wisdom. Utilizing a heterodox approach, Pablo G. Bortz provides a fresh look for understanding the interaction between these three factors while identifying challenges and possible alternatives for an expansionary and progressive economic policy.
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Chapter 2: Growth and distribution: the last 300 years

Pablo G. Bortz

Abstract

This chapter reviews how different schools of thought studied the interaction between income distribution and economic growth, axing the discussion along two lines. On the one hand, the implications of different sources of income (profits and wages) for investment and economic activity; on the other hand, the use of such income (either save or spend) as stimulant or break of economic expansion. The chapter surveys main authors of classical economics, Marxist writings, neoclassical authors and Keynes and early Keynesian economists. It is concluded that Keynes, Kalecki and their followers provided the first consistent break with Say’s Law, notwithstanding different interpretations of Marx’s analysis by underconsumptionist theorists.

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