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There was a short period, at the eve of the Second World War, when the development of macroeconomic theory pushed imperfect competition to the fore. During these “years of high theory,” as Shackle called them, many issues were raised concerning income distribution and the trade cycle. Analysis of the relationship between imperfect competition and income distribution is the point of departure for this paper. The first section reviews how market imperfections were integrated into analysis of income distribution. The second section examines the role of income distribution effects in the trade cycle theories developed during the 1930s; the first part focusing on Kalecki’s 1939 theory based on a linear saving function, while the second part is devoted to Kaldor’s 1940 model analysis based on a non-linear saving function.JEL classification : B22, E12, E32, D33, D43