On Pasinetti's 'natural' rate of interest

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Abstract

This paper provides a concise exposition of the notion of ‘natural rate of interest’ introduced by Luigi Pasinetti in his structural change analysis. Its normative nature is suitably stressed: it is that rate of interest that allows that debt and credit relations among individuals do not alter a distribution of national income based on the ‘labour principle’, that is, a situation where each individual perceives income in proportion to the quantity of labour provided.
Original languageEnglish
Pages (from-to)6-27
Number of pages22
JournalBULLETIN OF POLITICAL ECONOMY
Volume2019
Publication statusPublished - 2019

Keywords

  • nominal numéraires
  • physical numéraires
  • rate of interest
  • structural change
  • technical progress

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