Kaldor’s theory of distribution

E768023

economic theory income distribution theory post-Keynesian model

Kaldor’s theory of distribution is a post-Keynesian economic model explaining how income is divided between wages and profits based on savings behavior and investment, emphasizing the role of profit shares in achieving macroeconomic equilibrium.

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Statements (46)

Predicate	Object
instanceOf	economic theory ⓘ income distribution theory ⓘ post-Keynesian model ⓘ
assumption	closed economy without government in basic version ⓘ constant output-capital ratio ⓘ constant propensity to save out of profits ⓘ constant propensity to save out of wages ⓘ full employment of labor in the long run ⓘ given real investment rate ⓘ mark-up pricing and imperfect competition in extended versions ⓘ
contrastsWith	neoclassical marginal productivity theory of distribution ⓘ
coreConcept	functional distribution of income ⓘ investment-driven growth ⓘ macroeconomic equilibrium via profit share adjustment ⓘ profit share of income ⓘ saving behavior of workers and capitalists ⓘ wage share of income ⓘ
creator	Nicholas Kaldor NERFINISHED ⓘ
criticizedFor	limited treatment of financial sector and open economy aspects ⓘ simplified treatment of labor market and wage determination ⓘ strong assumption of full employment ⓘ
explains	how changes in investment affect profit share ⓘ how income is divided between wages and profits ⓘ relationship between saving, investment, and income shares ⓘ role of profit share in achieving growth equilibrium ⓘ
field	growth theory ⓘ income distribution ⓘ macroeconomics ⓘ post-Keynesian economics ⓘ
goal	to link income distribution with growth and saving behavior ⓘ
implies	distribution is endogenously determined by macro conditions ⓘ higher investment requires higher profit share ⓘ profit share adjusts to equate saving and investment ⓘ
influenced	subsequent post-Keynesian distribution and growth models ⓘ
influencedBy	Cambridge capital controversies context ⓘ Keynesian theory of effective demand ⓘ
mathematicalForm	profit share as function of investment rate and saving propensities ⓘ
normativeAspect	emphasizes role of policy in influencing distribution via investment ⓘ
relatedTo	Cambridge theory of distribution NERFINISHED ⓘ Harrod–Domar growth model NERFINISHED ⓘ Kaldor–Pasinetti theorem NERFINISHED ⓘ Kaleckian distribution and growth models NERFINISHED ⓘ
timePeriod	mid-20th century ⓘ
usesConcept	differential saving propensities of workers and capitalists ⓘ income-expenditure equilibrium ⓘ normal rate of profit ⓘ

Referenced by (1)

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Baron Kaldor → notableFor → Kaldor’s theory of distribution ⓘ

subject surface form: Nicholas Kaldor