Kaldor's theory of distribution: an information‐theoretic approach

Based on the assumptions of the neo‐Keynesian distribution theory and using an information‐theoretic approach, this paper derives the distribution of income between income units. This makes it possible for the theory of functional distribution to handle more complicated social relations and savings behaviour. This also helps us to understand the savings behaviour of individual households and the ways in which they aggregate over the entire population to produce national saving.