Finance and the Cambridge equation: A comment

Abstract

In a paper published in this journal, Giuseppe Ciccarone (2004) attempts to show that the Pasinetti theorem allows for the profit-making financial sector. In this effort, however, he ends up unwittingly associating the theorem with the Wicksellian monetary theory. The present note traces the origin of this uncomfortable association to his incomplete understanding of the income of financial capitalists, and demonstrates that the Pasinetti theorem is in the Post-Keynesian tradition of 'monetary analysis', in contrast to the 'real analysis' of the Wicksellian theory.