Change in income distribution and aggregate spending
Constraints on full-employment
Bibliographic Data
| ID | 12229304 |
|---|---|
| Authors | Philip Arestis (0000-0001-8729-4846, University of East London, corresponding author), Peter Howells (University of East London) |
| Year | 1995 |
| Volume | 7 |
| Issue | 2 |
| Pages | 150-163 |
| Publication date | 1995-04-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Review of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0953-8259 • E-ISSN: 1465-3982 |
| Publisher | Taylor & Francis (PUBLISHER • GB) |
| DOI | 10.1080/09538259500000035 |
| OpenAlex | W2072979898 |
| Language | EN |
| References cited | 23 |
During the 1980s, rising income inequality in the UK resulted partly from market conditions, and partly from supply-side policies that reduced social security benefits and income supports for low-wage earners. Greater Inequality, plus low levels of investment spending (relative to consumption)hinder the ability of demand management to raise the level of output and employment in the UK economy. Higher income earners have higher import propensities. Consequently, at any stage of the economic cycle, the trade dificit is now larger than it was before 1980. Increases in demand leak into a demand for imports, further reducing the incentive to invest. The paper argues for lower interest rates to encourage investment, and a fiscal policy that redistributes income towards those with lower incomes to solve these problems
Aggregate demand · Consumption (sociology · Distribution (mathematics · Economic inequality · Economics · Fiscal policy · Incentive · Income distribution · Inequality · Investment (military · Labour economics · Market economy · Monetary economics · Monetary policy · Wage · Economic Theory and Policy · Housing, Finance, and Neoliberalism · Political Economy and Marxism
| Highly cited | No |
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