Kaldor’s “Institutional” Theory of Income Distribution Revisited: Different Views on the Nature of the Corporate Economy

Abstract:

Kaldor’s one-sector framework of the “institutional” theory of income distribution is extended to a two-sector setting. This extension requires an explicit consideration of the long-period relationships between the two sectors, and thereby brings to more light two different views on the nature of the corporate economy implicitly represented by Kaldor and by his critics. It is claimed that both of these views omit some important aspects of a fully developed capitalist corporate economy. A third alternative view, which incorporates all of these aspects, is suggested.

Key Words::

• corporate economy
• Kaldor
• Pasinetti