Trouble with Clark’s Theory of Distribution
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Publish date: 2016-12-31
Gospodarka Narodowa 2016;286(6):23–42
The main objective of the article is to demonstrate the falseness of the so-called marginal theory of distribution as it is used today. This theory was originally coined by American economist John Bates Clark in the late 19th century. However, the modern version of the theory, used in macroeconomic models including dynamic stochastic general equilibrium (DSGE) modeling, departs from the original concept. In the first section of this article, the history of the theory of distribution is presented, from the time Clark formulated the theory to the present day. In the following section, a formal proof of the falseness of the contemporary version of the marginal theory of distribution is shown. The proof is illustrated by examples using data from Italy and Poland.