A Post Keynesian Model of Growth and Wealth Distribution: Government’s Optimal Tax Choice Using an Intertemporal Infinitely Representative Agent

Abstract

The article evaluates how a post Keynesian model of growth and wealth distribution in the line of Kaldor-Pasinetti can be extended using an infinitely lived representative agent of the type of Ramsey (1928). It is verified that the model permits the inclusion of leisure as a variable class distinctive as well as permits the government to choose optimal taxes on profits and on wages once the economic agents defined for this economy respond to fiscal policies. The results show that the Dual Theorem does not hold, the marginal propensity to save of the capitalists is endogenous and, given the specificity for this economy, the tax on the gain from capital is zero in the long run equilibrium.

Keywords

• economic growth
• wealth distribution
• intertemporal models