Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314506 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17609
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper proposes a theory of the mark-up that is embedded in a circuit model of the capitalist mode of production. The model and the theory are built on Keynes's principle of effective demand, Graziani's monetary theory of production and Pivetti's monetary theory of distribution. The price-setting mechanism is conceived as driven by a Kaleckian rule. The rate of interest on bank loans and the propensities to save of different macro-players are shown to affect the level of the mark-up, thus contributing to explain "labour exploitation" as measured by the average gap between worker's pay and productivity. In other words, "labour exploitation" is seen as being in part originated by monetary phenomena, such as the rentability of bank credit and the macro-players' propensities to accumulate money in a bank account.
Subjects: 
profit
wage
money
finance
capitalism
JEL: 
B22
E11
E12
E40
Document Type: 
Working Paper

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