Income Inequality, Indebtedness, and Post Keynesian Macrodynamics

Mark Setterfield

Oct 3

Written By SCEPA

WORKING PAPER

(382 KB)

A Kaleckian growth model is modified to incorporate working households who borrow to finance some part of their consumption spending.

The impact of this behavior on the sustainability of the growth process is then studied by means of a numerical analysis that captures various dimensions of increased income inequality in the US. The results show that the precise manner in which debtor households service their debts has important effects on the economy’s macrodynamics.

working paper

SCEPA

Income Inequality, Indebtedness, and Post Keynesian Macrodynamics

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SCEPA is part of the Economics Department at The New School for Social Research