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

See all articles by Manoj Atolia

Manoj Atolia

Florida State University - Department of Economics

Santanu Chatterjee

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Stephen J. Turnovsky

University of Washington - Institute for Economic Research; CESifo (Center for Economic Studies and Ifo Institute)

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

Atolia, Manoj and Chatterjee, Santanu and Turnovsky, Stephen J., Growth and Inequality: Dependence on the Time Path of Productivity Increases (and Other Structural Changes) (September 1, 2011). Available at SSRN: https://ssrn.com/abstract=1321805 or http://dx.doi.org/10.2139/ssrn.1321805

Manoj Atolia (Contact Author)

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States
+1.850.644.7088 (Phone)
+1.850.644.4535 (Fax)

HOME PAGE: http://mailer.fsu.edu/~matolia/

Santanu Chatterjee

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Department of Economics
University of Georgia
Athens, GA 30602
United States
706-542-1709 (Phone)

HOME PAGE: http://https://sites.google.com/view/schatterjee/home

Stephen J. Turnovsky

University of Washington - Institute for Economic Research ( email )

Seattle, WA 98195
United States
206-685-8028 (Phone)
206-543-5955 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
131
Abstract Views
1,157
rank
228,570
PlumX Metrics