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Title: Project Evaluation and Organizational Form

Author(s): Thomas Gehrig, Pierre Régibeau and Katharine Rockett

Publication Date: May 1998

Keyword(s): imperfect communication, Imperfect Information and organizational form

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Gehrig, T, Régibeau, P and Rockett, K. 1998. 'Project Evaluation and Organizational Form'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1888