By Dr. Hans Ulrich Buhl (auth.)

The distribution of capital and source of revenue mostly and its re­ lation to wealth and financial progress specifically have attrac­ ted economists' curiosity for a very long time already. specially the, at the very least in part, conflicting nature of the 2 politi­ cal goals, particularly to acquire considerably huge monetary development and a "just" source of revenue distribution even as, has brought on the subject to turn into a topic of political discussions. because of those discussions, a number of versions of employees' participation within the earnings of growing to be economies were built. To a minor volume and with rather different good fortune, a few were applied in perform. it really is a ways past the scope of this paintings to stipulate a lot of these techniques from the prior centuries and, particularly, the previous many years. In monetary concept many authors, for example Kaldor [1955], Krelle [1968], [1983], Pasinetti [1962], Samuelson and Modigli­ ani [1966], to call yet a number of, have analyzed the long term eco­ nomic implications of employees' saving and funding. whereas such a lot of this wide literature is very fascinating, it suffers from the truth that it doesn't explicitly think about both employees' or capitalists' goals and therefore neglects their affects on monetary development. hence, within the framework of a neo-classical version, those pursuits and their affects can be emphasised here.

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T-1 and {W~}t=1, .. ,T are given by 1) Recall that for feasiblity of a sequence of capital stocks or wage rates it is necessary that for all t we have o ~ Wt ~ F(K t _ 1 ,L t _ 1 ,t)- Dt ' t = 1, .. ,T. 2) Again, this abbreviation of the partial derivatives of the utility function stands for auW aw (W 1 '··'WT ) \ ~ t WT=WT(~_1'~) , T = 1, .. ,T. • ,T. 4) reduce to t 2, •• ,T. 4), the corresponding result from the preceding section, we observe: (i) For u t = 1 both equations are equivalent. Thus, if capitalists invest all their residual income, the same optimal capital stocks are obtained as in the preceding section, where utility from total consumption was maximized.

17) u* t The latter is then given by (l+m)k*-a(w+d) f(k*)-w-d u* t 2, •. ,T-1. 6 1 ). 6. This value certainly does not stand in (sharp) con- trast to empirical evidence and it would be interesting to investigate and compare the corresponding values in the industrialized world. After this example we turn to investigation of distributional aspects. 19) at = a = n(k*) (l+m)/(Hm) , t 2, •• , T-1 . 20) y = u-a [1- ~+m n (k*) l+m t 2, •. ,T-1. 22) 1) (a-a)/(u-a) To understand this parameter value, see deduction (D2) on page 26.

It is interesting to note that in the classical model of economic growth capitalists were assumed to invest all their income while workers were assumed to consume only. (E) w For u t E (at' 1) marginal productivity of capital is larger and thus the value of the capital stock is strictly smaller than in the preceding section. Thus, in the more realistic case, where capitalists consume part of their residual income, workers' control over wages leads to smaller capital stocks. 41 (iii) Surprisingly enough, the workers' propensity to save does not affect marginal productivity of the optimal capital stocks.

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