IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v8y2008i1n34.html
   My bibliography  Save this article

Functional Distribution, Land Ownership and Industrial Takeoff: The Role of Effective Demand

Author

Listed:
  • Bilancini Ennio

    () (University of Siena)

  • D'Alessandro Simone

    () (University of Pisa)

Abstract

In this paper we analyse how the distribution of land property rights affects industrial takeoff and aggregate income through its impact on effective demand. We apply a modified version of the model provided in Murphy et al. (1989, QJE) which allows us to analyse the role of land distribution when it is independent of the distribution of firm ownership. We extend the result of Murphy et al. (1989, QJE) by showing that industrialization and income depend non-monotonically on the distribution of land and by demonstrating that this result is due to the way land distribution affects the distribution of profits among firms. Moreover, we show that there may be a tradeoff between industrialization and income, the latter being associated with a distribution of land which is more equal than that associated with maximum industrialization.

Suggested Citation

  • Bilancini Ennio & D'Alessandro Simone, 2008. "Functional Distribution, Land Ownership and Industrial Takeoff: The Role of Effective Demand," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-36, August.
  • Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:34
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/bejeap.2008.8.1/bejeap.2008.8.1.1912/bejeap.2008.8.1.1912.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jeon, Yoong-Deok & Kim, Young-Yong, 2000. "Land Reform, Income Redistribution, and Agricultural Production in Korea," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 253-268, January.
    2. Kiminori Matsuyama, 2002. "The Rise of Mass Consumption Societies," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1035-1070, October.
    3. Zweimuller, Josef, 2000. "Schumpeterian Entrepreneurs Meet Engel's Law: The Impact of Inequality on Innovation-Driven Growth," Journal of Economic Growth, Springer, vol. 5(2), pages 185-206, June.
    4. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    5. Giorgio Bellettini & Gianmarco I. P. Ottaviano, 2005. "Special Interests and Technological Change," Review of Economic Studies, Oxford University Press, pages 43-56.
    6. Galor, Oded & Moav, Omer & Vollrath, Dietrich, 2003. "Land Inequality and the Origin of Divergence and Overtaking in the Growth Process: Theory and Evidence," CEPR Discussion Papers 3817, C.E.P.R. Discussion Papers.
    7. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1989. "Income Distribution, Market Size, and Industrialization," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 537-564.
    8. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    9. Eswaran, Mukesh & Kotwal, Ashok, 1993. "A theory of real wage growth in LDCs," Journal of Development Economics, Elsevier, pages 243-269.
    10. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, pages 259-287.
    11. repec:cup:apsrev:v:100:y:2006:i:01:p:115-131_06 is not listed on IDEAS
    12. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(01), pages 115-131, February.
    13. Mani, Anandi, 2001. "Income Distribution and the Demand Constraint," Journal of Economic Growth, Springer, vol. 6(2), pages 107-133, June.
    14. Baland, Jean-Marie & Ray, Debraj, 1991. "Why does asset inequality affect unemployment? A study of the demand composition problem," Journal of Development Economics, Elsevier, pages 69-92.
    15. Abhijit V. Banerjee & Paul J. Gertler & Maitreesh Ghatak, 2002. "Empowerment and Efficiency: Tenancy Reform in West Bengal," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 239-280, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. André Lorentz & Tommaso Ciarli & Maria Savona & Marco Valente, 2016. "The effect of demand-driven structural transformations on growth and technological change," Journal of Evolutionary Economics, Springer, pages 219-246.
    2. Álvarez, Jorge & Bilancini, Ennio & D'Alessandro, Simone & Porcile, Gabriel, 2011. "Agricultural institutions, industrialization and growth: The case of New Zealand and Uruguay in 1870-1940," Explorations in Economic History, Elsevier, vol. 48(2), pages 151-168, April.
    3. Karayalcin, Cem, 2016. "Property rights and the first great divergence: Europe 1500–1800," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 484-498.

    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:34. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.