Income Distribution and Economic Growth: A Critical Approach

Abstract

The aim of this paper is to review the Kaleckian and post-Kaleckian literature on income distribution and economic growth and question the extent to which they analyse countries’ economic regimes and economic performances properly and appropriately to understand countries’ economic performances. The debate focuses on the inclusion of profit margin in the investment function as a way to characterize the effective demand regime in the neoliberal era as a profit-led growth regime. Our argument is that this inclusion is not able to evaluate properly the countries’ economic growth in terms of the consistency between its effective demand regimes and income distribution.