An introduction to the distributional role of bank credit to workers in a surplus approach framework

Riccardo Zolea

No PKWP2403, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: The Classics and Marx, but also more recent contributions inspired by them, assume that the interest rate is a part of the profit rate. Over time, however, credit towards consumption and for the purchase of housing by workers has taken on greater and greater economic weight. This paper therefore aims to study this issue from a theoretical point of view, analysing its premises and implications. After investigating the necessary conditions on both the demand side (workers) and the supply side (banks), an attempt is made to analyse the distributional effects of a change in the interest rate. The results appear rather complex and difficult to interpret, suggesting a certain difficulty in identifying a simple dynamic that can be generalised to any economic context.

Keywords: surplus approach; interest rate; mortgage (search for similar items in EconPapers)
JEL-codes: E11 E40 (search for similar items in EconPapers)
Pages: 17
Date: 2024-02
New Economics Papers: this item is included in nep-ban, nep-hme and nep-pke
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