Interest Rate and Wages: The Distributional Role of Bank Credit to Workers in the Surplus Approach
Riccardo Zolea
What the paper says
The large majority of theoretical contributions on the nature of the relationship between the rate of profit and the rate of interest - the Classics and Marx, but also more recent contributions inspired by them - assume that the interest rate is a part of the profit rate, and thus that credit is only targeted at firms. Over time, however, credit towards consumption and for the purchase of housing by workers has taken on greater and greater economic weight, thanks also to financialisation. This paper therefore aims to study this issue from a theoretical point of view, analysing its premises and implications. After investigating the necessary conditions for credit to workers from both the demand side (workers) and the supply side (commercial banks), an attempt is made to analyse the functional distributional effects of a variation in the interest rate, at a high level of theoretical abstraction. Although the picture is rather complex, it seems possible to identify, at least in the short run, a clear inverse relationship between the interest rate and the real wage, passing through the increase in the price of commodities that can be reasonably considered within the basket of commodities of the real wage.
1 citation
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.16 × 0.4 = 0.06 |
| M · momentum | 0.53 × 0.15 = 0.08 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.