The distributive monetary analysis of a (un)sustainable economy

Samuele Bibi*

*Corresponding author for this work

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Abstract

This article is a post-Keynesian stock flow consistent (PK-SFC) model that analyses the dynamics of an economy characterised by several — often individually studied — features of PK-SFC studies together with some innovative aspects. In particular, we investigate the income and wealth distribution between two social classes, capitalists and workers, after a period of a crisis subject to different policy scenarios. Non-financial firms but also government can undertake investments decisions and both accumulate capital. Finally, we consider the workers' and capitalists' consumption behaviour that contributes to produce (un)sustainable paths. Our model is built upon Bibi (2020, 2021) within an endogenous money framework and is calibrated using available data for major advanced economies. Simulations are conducted to question the different government fiscal policies to reduce unemployment boosting the economic activity, to obtain a more equitable distribution between social classes while obtaining those goals in a sustainable way.

Original languageEnglish
Pages (from-to)1-34
Number of pages34
JournalReview of Political Economy
Early online date27 Apr 2023
DOIs
Publication statusE-pub ahead of print - 27 Apr 2023

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