Growth, Distribution, and Effective Demand

Spanning theoretical and empirical contributions in the tradition of classical political economy and post-Keynesian economics, this volume explores the relationship between economic growth and the distribution of income and wealth. The book makes a case for a rigorous empirically informed alternative economic scholarship providing more progressive and inclusive policy prescriptions than the dominant neoclassical paradigm. Mainstream economics has only recently showed interest in the problems with the distribution of income and wealth. Conversely, issues of distribution have been central in the debate among heterodox economists working in the classical and post-Keynesian tradition. The book begins by laying out “stylized facts” on the recent evolution of income distribution in the United States; it then moves to addressing the relationship between distribution, technical change, and trade in classical models, and presents a series of contributions along post-Keynesian lines on the interactions between demand and distribution, as well as policy implications. It then addresses the problems of path-dependence, hysteresis, and the potential instability arising from fiscal consolidation for economic growth, the distribution of income and wealth, and long-run growth. This volume marks a significant contribution to the literature on alternative approaches to macroeconomics, income distribution and economic policy.