Why are Kalecki's rentiers so boom tired?

Abstract

To many economists, not to mention all central bankers, inflation is considered to be public enemy number one. This paper seeks to understand why inflation should be so despised. To escape from simultaneous restrictions a temporal single system (TSS) approach is employed. Firstly a simple illustration of the TSS approach is considered. In order to focus on distributional issues a positive wage and a class of rentiers are built in. Rentiers hold money stocks, past accumulated value in money terms. Rentiers are assumed to lend to productive capitalists, i.e. we have finance capital. Once we build in money stocks we find that appropriate price increases can potentially hide the effect of falling exploitation of labour, transferring the cost of reduced exploitation from productive capitalists to rentiers. Finally, conclusions are drawn.

The relevance of Marx to all students of economics, no matter the level

“…Note Potts (2003a, b) presented abstract three‐sided models of the economy, including firms, workers and rentiers, to explore how each “class” may be affected in value terms by simulating alternative scenarios of strong growth and technological change and very slow growth and technological change. We found rentiers gained in value terms from very slow growth/technological change and suffered in value terms from fast growth/technological change (assuming rapid deflation does not maintain the value, as sequentially and non‐dualistically determined by labour time, of money).…”