Public Debt and the Pasinetti Paradox

Vincenzo Denicolò · Massimo Matteuzzi

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Economic Theory and Policy Fiscal Policies and Political Economy Economic theories and models

Abstract

The main purpose of this paper is to show that the Cambridge Theorem holds independently of Ricardian Equivalence, if the net rate of profits is properly defined.

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References

1971Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth 1945Full Employment in A Free Society.1981Growth and income distribution: Essays in economic theory 1978Debt Neutrality: A Brief Review of Doctrine and Evidence 1972The State and the Outcome of the Pasinetti Process 1989Ricardian debt / taxation equivalence in the Kaldor theory of profits and income distribution

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1992The Government Sector in Kaldor–Pasinetti Models of Growth and Income Distribution 1991Does Government Activity Invalidate the Cambridge Theorem of the Rate of Profit? A Reconciliation

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