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National Income

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Abstract

This article emphasizes how classical, neoclassical and real Keynesian economic theories are related to accounts of national income and its distribution. The more traditional parts of the analysis focus on rates of growth, capital accumulation and real net rates of return to capital, factoral distributions of income, and capital-theoretic problems in constructing matching national income accounts. More modern neo-Keynesian and monetary approaches are examined to account for theoretical roles played by money and banking in determining output, national income and technical progress. The effects of measures of banking output on modern national income accounts are stressed.

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Acknowledgments

I am indebted to Dr. Harry Postner, with whom I collaborated in preparing a paper given at a session we organized on ‘National accounts and the teaching of economics’ at the 1998 meetings of the International Association for Research in Income and Wealth (IARIW), for his continued criticisms of my work. The most dispiriting finding of that session was how few departments around the world maintained courses in national accounting as part of their curricula. I think the reason is that official national accounting places too little emphasis on connecting with modern economic theories and accordingly lose too much academic contact. I alone am responsible for this basic theme in this article. I also record with much gratitude the extremely critical and penetrating comments on the initial draft made by Professor Duncan McDowall of the history department at Carleton. Professor McDowall took valuable time away from writing a history of the Canadian national accounts to comment on my manuscript. I am also much obliged to Professor Mark Bils whose suggestion for tightening the monetary part of the argument was useful indeed. Finally, I thank Michael James for making my article far more readable than I could.

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Rymes, T.K. (2018). National Income. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_951

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