ABSTRACT
The post-Keynesian approach to income distribution takes the central proposition of Keynes’ theory of output and employment as its point of departure. This proposition can be summarized briefly in the statement that “given the psychology of the public, the level of output and employment as a whole depends on the amount of investment.” In orthodox theory, on the other hand, the distribution of income is determined by the price at which each individual can sell, in the competitive market, the services of the factor of production which he possesses. This approach is primarily concerned with the individual, or personal, distribution of income as determined on the microeconomic level by economic factors trading in specific factor markets. In the early stages of the development of the post-Keynesian approach to income distribution, it was believed by some economists that the results were highly dependent on the simplifying assumptions noted above, especially those concerning consumption out of various types of incomes.
