Financialization, income distribution, and aggregate demand in the USA.

Onaran, Ozlem and Stockhammer, Engelbert and Grafl, Lukas (2011) Financialization, income distribution, and aggregate demand in the USA. Cambridge Journal of Economics, 35 (4). pp. 637-651. ISSN 0309-166X

[img]
Preview
PDF
1MB

Official URL: http://tinyurl.com/6a3552h

This item is available in the Library Catalogue

Abstract

This paper investigates the effects of financialization and functional income distribution on aggregate demand in the USA by estimating the effects of the increase in rentier income (dividends and interest payments) and housing and financial wealth on consumption and investment. The redistribution of income in favor of profits suppresses consumption, whereas the increase in the rentier income and wealth has positive effects. A higher rentier income decreases investment. Without the wealth effects, the overall effect of the changes in distribution on aggregate demand would have been negative. Thus a pro-capital income distribution leads to a slightly negative effect on growth, i.e. the USA economy is moderately wage-led.

Item Type:Article
Additional Information:

Originally published as discussion paper no 136 (March 2010) by Middlesex University Business School, Department of Economics and Statistics.

Research Areas:Business School > Economics and International Development
ID Code:5035
Permissions granted by publisher:Pre-refereed version as permitted by publisher.
Deposited On:20 Apr 2010 13:27
Last Modified:22 Jul 2014 09:13

Repository staff only: item control page

Full text downloads (NB count will be zero if no full text documents are attached to the record)

Downloads per month over the past year