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Financial intermediation in a model of directed technological change

  • Shiyuan Pan

    ()

In this paper, the financial sector is introduced into a directed technological change economic model. The paper shows that, although financial development reduces the incidence of the researcher’s moral hazard, it will not necessarily promote growth. In addition, financial development may have a positive, negative or non-existent effect on wage inequality. One possible implication of this paper is that financial development decreases the growth rate while it increases skill premia. The impact of taxes on economic growth and wage inequality is also investigated in this paper. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s10888-012-9233-4
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Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 11 (2013)
Issue (Month): 4 (December)
Pages: 535-553

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Handle: RePEc:kap:jecinq:v:11:y:2013:i:4:p:535-553
Contact details of provider: Web page: http://springerlink.metapress.com/link.asp?id=111137

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
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  5. Ángel de la Fuente & José M. Marín, 1994. "Innovation, "bank" monitoring and endogenous financial development," Economics Working Papers 59, Department of Economics and Business, Universitat Pompeu Fabra.
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  13. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1055-1089, November.
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  18. Maria Fuensanta Morales, 2000. "Financial Intermediation in a Model of Growth Through Creative Destruction," Econometric Society World Congress 2000 Contributed Papers 0914, Econometric Society.
  19. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
  20. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
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  22. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
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