Does inequality hamper innovation and growth? An AB-SFC analysis.
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| Authors: | Caiani, Alessandro1 alessandro.caiani@unipv.it, Russo, Alberto2, Gallegati, Mauro2 |
|---|---|
| Source: | Journal of Evolutionary Economics. Mar2019, Vol. 29 Issue 1, p177-228. 52p. 1 Diagram, 3 Charts, 8 Graphs. |
| Subject Terms: | *Economic development, *Stock-flow analysis, *Labor productivity, *Macroeconomics, *Economic systems |
| Abstract: | We propose to analyze the relationship between inequality and economic development by means of an Agent Based-Stock Flow Consistent model where workers have been differentiated into four classes competing on segmented labor markets, and where firms' demand for each type of worker is affected by their hierarchical organization. In order to account for the impact of income and wealth distribution on consumption patterns, worker classes have diversified average propensities to consume and save. Finally, firms in the capital sector invest in R&D, thus possibly coming to produce more productive vintages of machineries, which affect the evolution of labor productivity in the consumption sector. The model is calibrated using realistic values for the income and wealth distribution across different income groups and their average propensities to consume. Results of the simulation experiments suggest that more progressive tax schemes and measures that sustain the dynamics of wages of low and middle level workers concur to foster economic development and to reduce inequality. However, the latter seem to be more effective under both respects. Therefore, the model results are broadly in line with the literature suggesting the prevalence of wage-led growth regimes in closed economic systems. In the conclusions we discuss current limitations and future development of the present research. [ABSTRACT FROM AUTHOR] |
| Database: | Entrepreneurial Studies Source |
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| Header | DbId: ent DbLabel: Entrepreneurial Studies Source An: 135779309 AccessLevel: 6 PubType: Academic Journal PubTypeId: academicJournal PreciseRelevancyScore: 0 |
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| Items | – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Caiani%2C+Alessandro%22">Caiani, Alessandro</searchLink><relatesTo>1</relatesTo><i> alessandro.caiani@unipv.it</i><br /><searchLink fieldCode="AR" term="%22Russo%2C+Alberto%22">Russo, Alberto</searchLink><relatesTo>2</relatesTo><br /><searchLink fieldCode="AR" term="%22Gallegati%2C+Mauro%22">Gallegati, Mauro</searchLink><relatesTo>2</relatesTo> – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Journal+of+Evolutionary+Economics%22">Journal of Evolutionary Economics</searchLink>. Mar2019, Vol. 29 Issue 1, p177-228. 52p. 1 Diagram, 3 Charts, 8 Graphs. – Name: Subject Label: Subject Terms Group: Su Data: *<searchLink fieldCode="DE" term="%22Economic+development%22">Economic development</searchLink><br />*<searchLink fieldCode="DE" term="%22Stock-flow+analysis%22">Stock-flow analysis</searchLink><br />*<searchLink fieldCode="DE" term="%22Labor+productivity%22">Labor productivity</searchLink><br />*<searchLink fieldCode="DE" term="%22Macroeconomics%22">Macroeconomics</searchLink><br />*<searchLink fieldCode="DE" term="%22Economic+systems%22">Economic systems</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: We propose to analyze the relationship between inequality and economic development by means of an Agent Based-Stock Flow Consistent model where workers have been differentiated into four classes competing on segmented labor markets, and where firms' demand for each type of worker is affected by their hierarchical organization. In order to account for the impact of income and wealth distribution on consumption patterns, worker classes have diversified average propensities to consume and save. Finally, firms in the capital sector invest in R&D, thus possibly coming to produce more productive vintages of machineries, which affect the evolution of labor productivity in the consumption sector. The model is calibrated using realistic values for the income and wealth distribution across different income groups and their average propensities to consume. Results of the simulation experiments suggest that more progressive tax schemes and measures that sustain the dynamics of wages of low and middle level workers concur to foster economic development and to reduce inequality. However, the latter seem to be more effective under both respects. Therefore, the model results are broadly in line with the literature suggesting the prevalence of wage-led growth regimes in closed economic systems. In the conclusions we discuss current limitations and future development of the present research. [ABSTRACT FROM AUTHOR] |
| PLink | https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=ent&AN=135779309 |
| RecordInfo | BibRecord: BibEntity: Identifiers: – Type: doi Value: 10.1007/s00191-018-0554-8 Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 52 StartPage: 177 Subjects: – SubjectFull: Economic development Type: general – SubjectFull: Stock-flow analysis Type: general – SubjectFull: Labor productivity Type: general – SubjectFull: Macroeconomics Type: general – SubjectFull: Economic systems Type: general Titles: – TitleFull: Does inequality hamper innovation and growth? An AB-SFC analysis. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Caiani, Alessandro – PersonEntity: Name: NameFull: Russo, Alberto – PersonEntity: Name: NameFull: Gallegati, Mauro IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 03 Text: Mar2019 Type: published Y: 2019 Identifiers: – Type: issn-print Value: 09369937 Numbering: – Type: volume Value: 29 – Type: issue Value: 1 Titles: – TitleFull: Journal of Evolutionary Economics Type: main |
| ResultId | 1 |
