Technological progress and income inequality

Edi Karni*, Itzhak Zilcha

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper examines the effects of Hicks-neutral, Harrod-neutral, and Solow-neutral technological improvements on the distribution of income in an overlapping generations economy with endogenous labor supply and a bequest motive. Income inequality in this model is generated by a stochastic process representing random variations in intergenerational transfers and pure luck. The comparative dynamics analysis trace the effects of the aforementioned technological changes in each and every period after they occur. These effects depend on the nature of the technological change and on the elasticity of substitution.

Original languageEnglish
Pages (from-to)277-294
Number of pages18
JournalEconomic Theory
Volume5
Issue number2
DOIs
StatePublished - Jun 1995

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