Public capital, redistribution, and growth in a two-class economy

We develop a growth model with a productive and redistributive role for the public sector in a twoclass economy. We focus on two different model closures: a Classical-Marxian one, which produces endogenous growth, and a Post-Keynesian one where growth is exogenous. When growth is endogenous, the policy maker fixes the long run accumulation rate and the after tax income shares. In the exogenous growth model, the government determines the after tax income shares and the unemployment compensation. In both cases, the policy choice is compared to a benchmark scenario involving no redistribution.