Innovation, Diffusion and the Distribution of Income in a Malthusian Economy
AbstractBetween 5000 BCE and 1800, the population of the world grew 120-fold despite constraints on the total amount of land available for production. This paper develops a model linking population growth to increasing productivity driven by random innovation and diffusion. People are endowed with a set of skills obtained from their parents or neighbours, but those skills are imperfectly applied during their lifetimes. The resulting variation in productivity leads to a distribution of income and to a process of diffusion whereby high-income activities spread at the expense of low-income activities. An analytic formula is derived for the steady-state distribution of income. The model predicts that the rate of growth of population approaches an asymptotic limit, whereupon there are no scale effects. The model also predicts that if the rate of diffusion of knowledge is increased, the growth rate will increase.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 9849.
Date of creation: 15 May 2008
Date of revision:
Selection; Malthusian; Diffusion; Innovation;
Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- N00 - Economic History - - General - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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