Growth and Inequality: Dependence on the Time Path of Productivity Increases (and Other Structural Changes)
37 Pages Posted: 5 Jan 2009 Last revised: 7 Sep 2011
Date Written: September 1, 2011
Abstract
This paper examines the significance of the time path of a given productivity increase on growth and inequality. Whereas the time path impacts only the transitional paths of aggregate quantities, it has both transitional and permanent consequences for wealth and income distribution. Hence, the growth-inequality tradeoff generated by a given discrete increase in productivity contrasts sharply with that obtained when the same productivity increase occurs gradually. The latter can generate a Kuznets-type relationship between inequality and per-capita income. Our results suggest that economies with similar aggregate structural characteristics may have different outcomes for income and wealth inequality, depending on the nature of the productivity growth path.
Keywords: Growth, Income and Wealth Inequality, Kuznets' Curve
JEL Classification: O17, O41
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Labour Market Institutions and the Personal Distribution of Income in the OECD
-
Social Spending Generosity and Income Inequality: A Dynamic Panel Approach
-
Social Spending Generosity and Income Inequality: A Dynamic Panel Approach
-
The Impact of Redistributive Policies on Inequality in OECD Countries
By Philipp Dörrenberg and Andreas Peichl
-
Relativity in Trade Theory: Towards a Solution to the Mystery of Missing Trade
By Eric O'neill Fisher and Sharon L. May
-
Per Capita Income Distribution: Linking Theory to Empirics
By Leone Leonida and Annalisa Marini
-
Growth and Inequality Tradeoffs in a Small Open Economy
By Yu-chin Chen and Stephen J. Turnovsky