Long-Run Growth and Income Distribution: Evidence for Italy and the US
AbstractIn this paper we investigate the long-run growth process in Italy and the US over the period 1920-2001, using a common trends model. Coherent with the neoclassical growth model, we find that long-run economic growth can be explained by two permanent shocks, namely a technological shock and a labour supply shock. Interestingly, technological progress has an initial negative impact on the wage share, and a successive positive, but transitory impact on income equality for Italy, and a permanent and positive impact for the US, pointing to a cycle in income distribution. On the other hand, the labour supply shock has a transitory and positive impact on the wage share for Italy, and a permanent and negative impact on the wage share for the US, possibly reflecting different labour market institutional characteristics. Hence, fluctuations in the distribution of income should be expected as a consequence of economic growth.
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Bibliographic InfoArticle provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.
Volume (Year): 62 (2003)
Issue (Month): 2 (October)
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Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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