This comment came to refute and correct the idea of Charles (2007) about the negatively implications in the income distribution when the government expand the consumption in favour to households. We prove that the political choice, to both cases (increasing consumption or increasing profit), impact positively the income distribution and does not affect the essential nature of the Kaldor neo-Pasinetti dynamic equilibrium results and the “Cambridge Equation”. The stability of the model is guarantee by applying the Olech’s Theorem to the case.
The theory of the long-run perspective aims to explain how economies grow. On the other hand, Kaldor developed a theory that concerns not only this objective but to build a model also considering the implications in the income distribution. This paper consists of a rigorous review of the evolution of Kaldor’s Theory, treating with government activities, the financial market, and so on, to show the importance of the theme in our days. One contribution of this paper is to lead the researchers to a solid understanding of Growth and Income Distribution Models derivate from the Cambridge School and to present a new vision of the relevance of the heterodox scientific world.
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