A MONETARY AND FINANCIAL THEORY OF DISTRIBUTION

ARIEL DVOSKIN; GERMAN FELDMAN

Roma

Seminario; Centro Sraffa Seminar, en colaboración con Dipartimento di Economia, Università Roma Tre; 2019

Univrsita degli Studi di Roma Tre

Abstract. We extend the distributive closure of the classical price system known as the «monetary theory of distribution» (MTD), originally introduced by the Italian scholars Massimo Pivetti and Carlo Panico in the 1980s and 1990s. Our aim is to enrich their framework by explicitly characterizing the role of financial aspects of modern capitalist economies. It is argued that Pivetti?s approach is consistently formulated, but it is too general to satisfactorily account for the role of monetary and financial factors beyond the level of the policy interest rate. On the other hand, Panico?s contribution, despite explicitly discussing the current role played by finance and treating the banking sector as a basic industry in terms of Sraffa, is not logically sound. But several features of his framework can be combined with Pivetti?s price equations to give rise to a monetary and financial theory of distribution, which can show, for instance, the impact on normal profitability of financial innovations, changes in financial regulation or in the structure of the loan market.