Georgios Argitis

Monetary Policy and the Distribution of Income: Evidence for the United States and the United Kingdom

The shift in the emphasis of macroeconomic policy during the late 1970s and early 1980s toward combating inflation rather than maintaining full employment and the associated tight monetary policies fostered by the majority of the advanced industrialized countries, caused interest rates to increase to unprecedented heights. Income distribution and unemployment are among the economic variables that may have been mostly affected by the new, restrictive menu of macroeconomic policy. Yet, little attention has been paid to the potentially profound effects of monetary policy and high interest rates on the functional distribution of income. 1 In this paper we set out to illuminate the issues surrounding the effects of monetary policy on changes in the income shares of industrial capital, financial capital, and labor in the nonfinancial corporate sector, in the United States and the United Kingdom? The second section develops a post-Keynesian-Kaleckian perspective of income distribution and a mechanism to show the way in which monetary policy might affect the distribution of income between the three aforementioned income groups.

Intra-capitalist Conflicts, Monetary Policy and Income Distribution

This paper investigates Marxs monetary analysis of the role of the interest rate in the distribution of surplus-value. It is argued that Marx allowed the interest rate to directly influence the distribution of surplus-value between enterprise profit and interest. Moreover, he thought the interest rate to be subject to the conflict between industrial and money capitalists. Recent developments in Sraffian and neo-Marxian literature provide the foundations for a Marxian analytical framework that allows intra-capitalist conflict, monetary policy and the interest rate to affect the intra-capitalist and the inter-class income distribution.

The financial fragility and the crisis of the Greek government sector

The purpose of this paper is to develop Minskyan financial fragility indices for the government sector and to examine the financial structure of the Greek government before and after the onset of the sovereign debt crisis in 2009. We provide empirical evidence that clearly shows the growing financial fragility of the Greek public sector in the 2000s. We also assess the effectiveness of the implemented bailout adjustment programmes in Greece and claim that the conducted austerity measures and fiscal consolidation have not significantly improved the financial posture of the Greek government sector. We argue that the implementation of fiscal and wage austerity in an economy that lacks structural competitiveness produces prolonged recession and unemployment with adverse feedback effects on the financial fragility of the government.

Are Full Employment and Social Cohesion Possible Under Financialization

Unemployment and unequal income distribution were singled out by J.M. Keynes, in the General Theory, as major faults of capitalist economies. This paper argues that there is a negative relationship between financialization and unemployment. In particular, we develop a simple Post Keyneian/Kaleckian model and explore distribution as well as institutional channels through which financialization might have negatively affected the employment performance of capitalist economies, undermining the social cohesion and egalitarian development. Furthermore, we argue that in the face of financialization full employment is likely to be attainable under the institutionalization of an Employer of Last Resort (hereafter ELR) policy strategy.