Income distribution and the size of the financial sector: a Sraffian analysis

Income Inequality and the Financial Industry

“…The aim of the paper is to examine how the size of the banking industry can affect inequality. It elaborates on a model presented in 2010 to celebrate the 50th anniversary of the publication of Sraffa's Production of Commodities (see Panico, Pinto, & Puchet Anyul, ) in order to derive an analytical exercise showing that the evolution through time of the wage share is affected by changes in the workers’ ability to capture the rises in value added per worker, by changes in the output composition of the economy and by the input composition of the productive structure, quantified by the value‐added per worker of each sector.…”

Janus Ante Portas

“…Factor remuneration becomes the determining instead of the determined factor, with either the wage or the profit rate known in advance, determined outside the sphere of production (Sraffa 1963(Sraffa [1960: 39). As a distributive variable the interest rate can have a profound effect on the economy, as was shown by Panico et al (2012); of course it itself is prone to exogenous determination and its value at any given point in time reflects past distributive conflicts that manifest themselves in current monetary policy rules and financial regulation, with the latter heavily influenced by lobbying activities. While these variables are taken as independent by the theoretician, in practice they are far from that, with different interest groups constantly trying to shift the parameters of the system in their own favor.…”

Sraffa and the Reconstruction of Economic Theory: Volume One

“…There is sometimes ambiguity in PostKeynesian literature, since changes in income shares may, in a sense, always be treated as changes in income distribution from a macroeconomic point of viewbut the underlying causes may be different in nature. For example, in the formal analysis presented in Panico et al (2012) the change in income shares is entirely caused by a change in the proportion between the value of capital and output, and not by a change in the rate of profit. The analysis therefore does not address the interpretation of the changes that have actually been taking place in most countries in recent decades.…”