Modeling Distribution and Growth: Replies to Garbellini and Wirkierman, Harcourt, and Nell

Lance Taylor

International Journal of Political Economy, 2014, vol. 43, issue 3, 44-54

Abstract: Income sources and uses are examined for the top 1% and lower 99% of the US size distribution-the groups are proxies for “capitalists” and “workers.” Large flows—notably proprietors’ incomes at the top and fiscal transfers at the bottom—cannot easily be assigned to capital or labor. Financial payments (interest and dividends) are concentrated at the top. Capital gains are similarly concentrated and comparable in magnitude. Together with financial flows they exceed business profits net of depreciation. Cumulating these flows over time is consistent with the empirical observation that the valuation ratio for the US corporate sector is greater than one. The richer group has positive savings; they are negative for the bottom 99% overall (especially below the Bdh percentile of the size distribution). These observations suggest that the US economy is not at a steady state. The nature of shifts in income and wealth distributions needed to support changes in steady states is discussed in light of the comments in this symposium.

Date: 2014
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DOI: 10.1080/08911916.2014.1002299

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