Income Distribution, Rentiers, and Their Role in a Capitalist Economy: A Keynes–Pasinetti Perspective

Abstract

:The paper reviews some of the important developments since the financial crisis both on the issue of secular stagnation, as put forth by Lawrence Summers (2014a Summers, L.H. 2014a. “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound.” Business Economics 49, no. 2: 65–73.[Crossref] , [Google Scholar]), and the rising share of profit as put forth by Thomas Piketty (2014 Piketty, T. 2014. Capital in the Twenty-First Century. Cambridge, MA: Belknap Press of Harvard University Press.[Crossref] , [Google Scholar]), and it also seeks to tackle the issue of income distribution in a Keynes–Pasinetti perspective that offers important Keynesian analytics of the cyclical and long-term interaction between the rentier and the nonrentier sectors. This alternative Keynesian perspective on income distribution serves to shed light, both theoretically and empirically, on the specific evolution of this socioeconomic interaction, by analyzing time series over long historical periods for both the United States and Canada going back to before the Great Depression. It also seeks to better frame the well-known policy perspective on the euthanasia of the rentiers espoused by Keynes in the General Theory.