ABSTRACT
This chapter conducts a preliminary survey of the appropriation of profit at the macro-economic level in the belief that the results will be useful to those engaged in constructing aggregate econometric models and aggregate theoretical models of the United Kingdom economy. The separation of ownership from control, and the wide dispersion of shareholdings among a typical company’s shareholders, encourages a board of directors to plough back as much profit as possible to finance the growth of the company. The safest approach is surely to use both saving and dividends as dependent variables in different models and compare the results. Moreover, the macroeconomic savings functions in the theoretical models of income distribution and determination are no longer relevant: instead of considering one equation in a macro-econometric model. The macro-econometric analysis suggests that the relationship between aggregate business saving and profit, after a difference transformation, takes the simple linear homogeneous form of equation.
