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Distribution and growth. A dynamic approach

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  • Patriarca, F.
  • Sardoni, C.

Abstract

This paper studies the effects of an (exogenous) distributional shock on accumulation and growth. We develop a model that studies the dynamics of demand, profits and investment following a change of the nominal wage-rate, which is not accompanied by a simultaneous proportional change of prices to maintain the initial distribution of income. The initial income distribution, however, is eventually restored through a gradual adjustment of prices to the new level of the nominal wage-rate.

Suggested Citation

  • Patriarca, F. & Sardoni, C., 2017. "Distribution and growth. A dynamic approach," Structural Change and Economic Dynamics, Elsevier, vol. 40(C), pages 1-9.
    • Handle: RePEc:eee:streco:v:40:y:2017:i:c:p:1-9
    DOI: 10.1016/j.strueco.2016.11.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Investment; Growth; Employment; Income distribution;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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