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This article explores the long-term and cyclical effects of the Pasinetti Index (PI) and their implications for income distribution and macroeconomic policy in a post-pandemic environment marked by inflationary pressures and increasingly restrictive central bank policies. It discusses the relevance of adopting a zero PI as monetary policy framework as either a short-term target or a long-term norm. The research underscores the importance of coordinating monetary and fiscal policies to achieve a balanced mix of short-term and long-term macroeconomic goals, as per the Pasinetti rule, aimed at stabilizing income distribution between rentier and non-rentier groups without compromising on a Keynesian full employment commitment. By analyzing historical data and employing a SVAR model for Canada and the United States, the study highlights the significant cyclical impact of PI fluctuations on unemployment and income distribution. The findings challenge the efficacy of rigid monetary policy rules and support a macroeconomic policy that reconciles short-term employment objectives and long-term distributional goals. [ABSTRACT FROM AUTHOR]

The article describes the origins of the Pasinetti index and Pasinetti rule and links both notions to debates over concerns regarding which socio-economic income group in a modern capitalist economy was being hurt and which broad income class was benefiting from the high interest rate policy, especially during the Volcker era of the 1980s. These were statistical constructs as well as distinct normative concepts that resulted from a close reading of Pasinetti’s original writings published in 1980–81. The purpose of the Pasinetti index was to measure and monitor the actual transfer between the rentier and non-rentier sectors of an economy both cyclically and over the long term. As discussed in some detail, both authors of this article had directly participated in those debates and had basically initiated the early discussions around these concepts among post-Keynesians and other heterodox economists. The first part of our article, after the introduction, is primarily focused on what came to be called the Pasinetti rule, while the following section of the article recounts how the different variants of the Pasinetti index came to be constructed and used. We conclude with a discussion of the possible continued relevance of the Pasinetti norm in today’s world. [ABSTRACT FROM AUTHOR]

This introductory article offers a brief overview of the life and works of Alain Parguez. Special focus is on the personal contact with the authors and on Parguez's major contributions to political economy since the early 1980s when the two authors first met him. [ABSTRACT FROM AUTHOR]

This article briefly recounts this author's personal experience with Alain Parguez and sketches some of his important contributions over four decades. It then tackles the contemporary policy controversy concerning net public spending and inflation, which is once again contentious in today's inflationary environment. Alain Parguez's viewpoint was diametrically opposed to the Hayekian position that deficit spending is inevitably inflationary; the latter presumed positive relation between deficits and inflation being questioned by simple empirical evidence available from Western industrial countries. In his writings, instead, Parguez defended a strong Keynesian position on the productive role of public spending. Outside of interest payments on the public debt, he considered public spending broadly in the nature of public investment unassociated with any predictable inflationary consequences, except perhaps in a fully-employed economy. "Good" public budgetary deficits generate much-needed physical productive capital but also essential human/social capital via government transfers. This view is contrasted with the views of two other celebrated post-Keynesian/circuitist writers, Augusto Graziani and Hyman Minsky, who despite important common features of their analyses vis-à-vis those of Parguez, held a somewhat different view of the inflationary impact of deficit spending. [ABSTRACT FROM AUTHOR]