Abstract

As is known, explicit consideration of the different propensities to consume of the various groups of income earners plays a major role in the attempts to extend Keynes's and Kalecki's principle of effective demand to the analysis of growth and functional distribution. This paper points out, by means of a simple multi-sectoral model, that those different consumption habits contribute to shaping the personal distribution of income in the economy, not only directly but also by influencing the impact on personal distribution, of policy measures involving income transfers.