Citation

Discussion Paper Details

Please find the details for DP1880 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Schumpeterian Entrepreneurs Meet Engel's Law: The Impact of Inequality on Innovation-Driven Growth

Author(s): Josef Zweimüller

Publication Date: May 1998

Keyword(s): Growth, hierarchic demand, Inequality and Innovation

Programme Area(s): Human Resources and International Macroeconomics

Abstract: This paper analyses the impact of inequality on growth when technical progress is driven by innovations. It is assumed that consumers have hierarchic preferences. As a result inequality affects demand and therefore the incentive to innovate. Whether more inequality is harmful or beneficial for growth depends on the initial distribution. Complementarities between a technical and a pecuniary externality resulting from the innovation process may generate multiple equilibria. Redistribution may push an economy trapped in underdevelopment to a high-growth regime.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1880

Bibliographic Reference

Zweimüller, J. 1998. 'Schumpeterian Entrepreneurs Meet Engel's Law: The Impact of Inequality on Innovation-Driven Growth'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1880