The Impasse of Post Keynesian Distribution Theory

Abstract

Why did the topic of income distribution loose its attraction for the economic profession? The article analyzes the structure of the Ricardian theory and of the post-Keynesian approach and discusses the question why after Pasinetti’s contribution distribution theory lost its economic significance and interpretative value. An alternative and less deterministic approach to functional distribution is proposed, taking into consideration the importance of money and expectations, the relation between the principle of effective demand and aggregate income and the difference between the behavior of the single entrepreneur and the macroeconomic system.