Income distribution in a monetary economy

Nazim Ekinci

PSL Quarterly Review, 2013, vol. 66, issue 267, 435-455

Abstract: In a monetary economy capital is a fund. This idea is captured by the circuit of capital. We define a circuit for fixed capital and argue that it is closed when the fund that initiates it is recovered in a present value sense. The circuit of newly invested fixed capital must be equivalent to the comparable direct circuit of money. This is the condition for monetary equilibrium in the sense of Keynes. From this equivalence it is possible to determine what the imputation for fixed capital must be, implying a definitive income distribution. The solution implies that capital assets that last longerthan the period of the circuit earn pure rent.

Keywords: Economics; Macroeconomics; Post-Keynesian Economics (search for similar items in EconPapers)
JEL-codes: D33 D46 E11 E12 E25 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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