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The Correlates of Rentier Returns in OECD Countries
PERI Working Papers
  • Arjun Jayadev, University of Massachusetts Amherst
  • Gerald Epstein, University of Massachusetts Amherst
Working Paper Number
123
Publication Date
1-1-2007
Disciplines
Comments
Working Paper 123
Abstract

This paper examines the correlates of rentier returns – returns to the ownership of financial assets -- in a sample of OECD countries between 1960 and 2000. We develop a simple bargaining model among three classes – industrial capitalists, rentiers and workers – and show that rentier income returns increase when domestic and foreign real interest rates costs of capital mobility fall, and the power of labor declines. Using an unbalanced panel dataset, the paper also econometrically investigates the impacts of proxies for these variables on rentier incomes. We find that interest rate liberalization, the reduction in the unionization rate of labor, and increased returns from foreign financial investments increase rentier returns. These results provide support both for the simple model and for common Post-Keynesian and Marxian stories of the impact of financialization and neo-liberal policy changes on income shares.

DOI
https://doi.org/10.7275/1282585
Citation Information
Arjun Jayadev and Gerald Epstein. "The Correlates of Rentier Returns in OECD Countries" (2007)
Available at: http://works.bepress.com/gerald_epstein/139/