Full text: Distribution and Growth

6 
2. Distribution and Growth 
In so far as the explanation of distribution in terms of 
quantity is not referred to extra-economic considerations 
anyhow, there are two kinds of approaches to long-term 
distribution: The one links it up with growth, the other with 
allocation (capital intensity). The link of distribution and 
growth has played a role in Marx although it is difficult to 
disentangle. It comes out in von Neumann's model with the 
equality of profit and growth rate. It is suggested by Kalecki's 
profit equation (profit equals investment plus capitalist's 
consumption) from which both Joan Robinson's golden age rule 
and Kaldor's distribution paper are derived. 
The idea is simply: If the saving comes exclusively from profit 
(and, in the simplest case, all of it is saved), and if income 
bears a constant relation to capital, then the share of profit A 
in income is determined by the growth rate:
	        

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