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Income distribution, effective demand and accumulation

ABSTRACT

The paper presents a survey of the main theoretical schools approaching the determination of income distribution profiles. This question has been the core of economic theory since its birth, with Adam Smith. Classical Political Economy had its focus on the relations between functional income distribution and the development process, proposing that growth could be promoted by an increase in the profit share of national income. Neoclassical economics maintained the focus on functional distribution, relating it, however, to a notion of relative scarcity of factors of production. Keynes’s General Theory changed the emphasis to personal distribution that would be related to the formation of the various elements of aggregate demand. Post Keynesian studies tried to relate Keynes’s views to classical insights on income distribution. The paper ends with a brief examination of some studies on Brazilian income distribution profiles.

KEYWORDS:
Income distribution; history of economic thought

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