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Structural Change and the Income Distribution: a Post-Keynesian disequilibrium model

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Author Info

  • Fabrizio Patriarca
  • Francesco Vona

    ()
    (Department of Economics, Department of Public Economics, Sapienza University of Rome)

Abstract

This paper extends the out-of-equilibrium literature to analyse a structural transition characterized by the emergence of a new sector that satisfies a want lower in the hierarchical scale. In particular, the dynamic interaction demand-supply can be a source of multiple long-run outcomes if both preferences and the technology evolve endogenously. It will be shown that a successful transition to a two-sector economy is ensured by a balanced distribution of innovative rents. Moreover, the full-employment region lies between two regions of classical and Keynesian unemployment, in contrast with the standard view of a negative relationship between real wages and employment. Finally, demand shortages, due to an unbalanced distribution, can bring about a long-run slump.

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File URL: http://dipartimento.dse.uniroma1.it/Economia/Publications/papers/patvon5.pdf
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Bibliographic Info

Paper provided by Dipartimento di Economia, Sapienza University of Rome in its series Working Papers - Dipartimento di Economia with number 5.

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Length: 21 pages
Date of creation: 2009
Date of revision: 2009
Handle: RePEc:des:wpaper:5

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Web page: http://dipartimento.dse.uniroma1.it/economia/
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Keywords: Structural Change; Income Distribution; Unemployment; Innovation; Habit formation;

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References

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  1. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
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  16. Francesco Vona & Fabrizio Patriarca, 2010. "Income Inequality and the Development of Environmental Technologies," Documents de Travail de l'OFCE 2010-22, Observatoire Francais des Conjonctures Economiques (OFCE).
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Cited by:
  1. Vona, Francesco & Patriarca, Fabrizio, 2011. "Income inequality and the development of environmental technologies," Ecological Economics, Elsevier, vol. 70(11), pages 2201-2213, September.

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