Financialisation, income distribution and aggregate demand in the USA
Onaran, Özlem, Stockhammer, Engelbert and Grafl, Lucas (2011) Financialisation, income distribution and aggregate demand in the USA. Cambridge Journal of Economics, 35 (4). pp. 637-661. ISSN 0309-166X (Print), 1464-3545 (Online) (doi:10.1093/cje/beq045)Full text not available from this repository.
This paper investigates the effects of financialisation 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 favour 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.
|Additional Information:|| First published online: 7 January 2011.  Published in print: July 2011.  Published as: Cambridge Journal of Economics, (2011), Vol. 35, (4), pp. 637-661.  Cambridge Journal of Economics is published on behalf of The Cambridge Political Economy Society.|
|Uncontrolled Keywords:||distribution, investment, consumption, financialisation|
|Subjects:||H Social Sciences > HB Economic Theory|
|School / Department / Research Groups:||School of Business|
School of Business > Work & Employment Research Unit
|Last Modified:||11 Dec 2013 12:59|
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