A Two-class Economy from the Multi-sectoral Perspective: The Controversy between Pasinetti and Meade-Samuelson-Modigliani Revisited

Kazuhiro Kurose

No 416, TERG Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: We examine the Pasinettian two-class multi-sectoral model with a microfoundation of capitalists and workers, specifcally, two combinations of their behaviour. First, both act as in?nitely lived agents (ILA) and second, capitalists act as ILA while workers follow overlapping generations behaviour. We analyse the switch of equilibria simul- taneously with the paradox in capital theory. Pasinetti equilibrium is independent of technology and the microfoundation. Dual equilibrium depends on technology and dif- fers by microfoundation. Numerical examples of net output/capital ratio and capital intensity imply we should analyse income and wealth distribution by the models with capital as a bundle of reproducible commodities.

Pages: 30 pages
Date: 2020-02
New Economics Papers: this item is included in nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:toh:tergaa:416

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