Rising Income Inequality, Increased Household Indebtedness, and Post Keynesian Macrodynamics

Mark Setterfield

No 1403, Working Papers from New School for Social Research, Department of Economics

Abstract: 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.

Keywords: Consumer debt; emulation; income distribution; Golden Age growth regime; Neoliberal growth regime (search for similar items in EconPapers)
JEL-codes: E12 E44 O41 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2014-12
New Economics Papers: this item is included in nep-gro, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:new:wpaper:1403

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