Veiled Repression: Mainstream Economics, Capital Theory, and the Distributions of Income and Wealth

29 Pages Posted: 21 Jan 2016

See all articles by Lance Taylor

Lance Taylor

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Date Written: December 9, 2015

Abstract

The Cambridge UK vs USA capital theory debates of the 1960s showed that the workhorse mainstream growth model relies on unsustainable assumptions. Its standard interpretation is not consistent with the last four decades of data. Part of an estimated increase in the ratio of personal wealth to income in recent years is due to higher asset prices. The other side of the accounts reveals that financialization and growing business debt partially offset the greater net worth of households. Attempts to interpret growth in wealth principally as a consequence of capitalization of rents are misleading. An alternative growth model based on Cambridge ideas can help correct these misinterpretations.

Keywords: Income distribution, wealth distribution, Cambridge controversies

JEL Classification: D3, E1

Suggested Citation

Taylor, Lance, Veiled Repression: Mainstream Economics, Capital Theory, and the Distributions of Income and Wealth (December 9, 2015). Institute for New Economic Thinking Working Paper Series No. 32. Available at SSRN: https://ssrn.com/abstract=2718708 or http://dx.doi.org/10.2139/ssrn.2718708

Lance Taylor (Contact Author)

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA) ( email )

80 Fifth Ave.
5th Floor
New York, NY 10027
United States

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