ABSTRACT
A common criticism of many of the theories of income distribution is that they are merely sets of identities which are irrefutable and therefore of little use to anyone who wishes to understand how the factor distribution of income changes in practice. This criticism has some justification but it is fair to argue that such tautologies are generally associated with functional relationships even if the latter are not given a prominent position in any one particular theoretical model. The group of macro-economic theories of income distribution derives from later Keynes, the Keynes of the general theory. These models construct a system of simultaneous equations, though identities may be introduced to make the number of equations equal the number of endogenous variables to be determined. Movements in the price level also influence the factor distribution of income in the short run. There is the statistical effect of stock appreciation on profit which obviously influences the ratio of profit to employee compensation.
