Abstract
Since Ricardo, one of the principal questions facing economists has been how to present a theory of income distribution. Ricardo (1817, p. 5) remarks on the historical fact that “in different stages of society, the proportions of the whole produce of the earth which will be allotted to each of these classes [the proprietor of the land, the owner of the stock or capital, and the laborers], under the name of rent, profit and wages will be essentially different.” He continues this theme by pointing out that “To determine the laws which regulate this distribution is the principal problem in political economy.”
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Notes
The widow’s cruse is an allegorical expression regarding the determinants of profits. Refer to note 1 of Chapter 3 for details.
Sen (1963, p. 57) calls this the “General Theory” model of Keynesian income distribution. The same understanding is seen in Weintraub (1958), Atsumi (1960), Okamoto (1967), Yasui (1969), and others. Refer to note 1 of Chapter 4 for Sen’s argument.
See “Historical Constancies” in Chapter 3 for an argument relating to this matter.
Keynes himself maintains this first postulate as heretofore subject only to the same qualifications as in classical theory. This means that, “with a given organization, equipment and technique, real wages and the volume of output (and hence of employment) are uniquely correlated, so that, in general, then an increase in employment can only occur to the accompaniment of a decline in the rate of real wages” (1936, p. 17). Regarding my argument on this point, particularly in an underemployment economy, see “A Symmetrical Change in Productivity Growth” in Chapter 2 and assumption v and an explanation of equation (5) in Chapter 4.
Refer to note 11 in Chapter 3 for Kaldor’s argument on the marginal productivity principles.
We consider these two kinds of treatment are a fairly important. For an argument on nominal terms and gross terms, see notes 6 and 5 in Chapter 3, respectively. The reasons for these treatment are stated in Chapter 4.
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© 1997 Springer Science+Business Media New York
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Iyoda, M. (1997). Introduction. In: Profits, Wages, and Productivity in the Business Cycle. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5376-8_1
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DOI: https://doi.org/10.1007/978-94-011-5376-8_1
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