Economic Growth and Macroeconomic Stabilization Policies in Post-Keynesian Economics
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Economic Growth and Macroeconomic Stabilization Policies in Post-Keynesian Economics

Edited by Hassan Bougrine and Louis-Philippe Rochon

Hassan Bougrine, Louis-Philippe Rochon and the expert contributors to this book explore issues of economic growth and full employment; presenting a clear explanation to stagnation, recessions and crises, including the latest Global Financial Crisis of 2007-8. With a central focus on the role played by government spending, deficits and debt as well as the setting of interest rates, the chapters propose alternative policies that can be used by central banks and fiscal authorities to deal with problems of income inequality, unemployment and slow productivity.
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Chapter 5: Household debt and the rentier share of income

Orsola Costantini


This chapter explores and develops research by Mario Seccareccia on household credit, and by Marc Lavoie and Mario Seccareccia on the rentier share of income. Seccareccia looks at household finances in terms of net lending/borrowing positions, exploring the effects of new household borrowing on the monetary circuit and on the rentierization of the economy. Based on this framework, the chapter discusses changes in the policy context and in the distribution and uses of household debt in the USA. In addition, it looks at how this phenomenon has influenced the distribution of income between non-financial and financial (rentier) sectors, through the interest-rate channel. To do so, the author uses a modified version of the Pasinetti index put forward by both authors, substituting the ten-year Treasury bill rate benchmark with an effective interest rate that is a weighted average of the rates applied to a number of different loans, including personal loans and mortgages. Finally, the chapter briefly discusses policy implications.

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