Permalink : http://hdl.handle.net/2115/5382

KEYWORDS : Valuation Ratio, Capital Gain, Income Distribution

The purpose of this paper is to reconsider the "valuation ratio," a close notion to the so-called "Q-ratio." It is always assumed to be a constant, even though it is not equal to unity. However, the assumption is inappropriate from the contemporary perspective. In fact, it has obscured the weakness of the post-Keynesian theory. Therefore, the assumption should be removed. We examine the result when its ratio is regarded as a variable. Finally, we conclude the need for the introduction of new parameter to denote a proportion of newly issued securities to the total purchased. (JEL E12, E44, F34, G1)