Abstract
Abstract
This study presents a theoretical framework that connects functional income distribution and personal income distribution from the Kaleckian perspective and investigates the effects of changes in mark-up rate and interest rate on income inequality in terms of the Gini coefficient. The results demonstrate that a rise in the mark-up rate with weak bargaining power of workers raises the Gini coefficient irrespective of a profit-led or wage-led demand regime. The analyses also demonstrate that a decline in the interest rate negatively affects the Gini coefficient if and only if the bargaining power of workers is sufficiently strong.
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics