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Rentiers and Workers-Capitalists in a Non-Classical Model
Department of Economics, University of Mumbai, Mumbai, India
- 1 Department of Economics, University of Mumbai, Mumbai, India
Journal of Mathematical Finance·Volume 03 (2013)·Pages 11–14·Published 29 April 2013·DOI10.4236/jmf.2013.32A002
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Abstract
We separate the “ rentier ” portion of the budget constraint of the representative agent from the “ income-plus-distributed profits ” segment. The former’s wealth consists exclusively of returns on government bonds, the latter’s wealth is wage income from working for firms plus the distributed profits of the latter. The non-neoclassical element is the non-impo sition of the market-clearing assumption. The Barro-Ricardo theorem only applies to rentiers. The level of activity is shown to depend on the level of employment along with a set of parameters that capture the imperfect competition of the model.
KeywordsFinancial WealthCompetitionPublic Works
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