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Financial intermediation in a model of directed technological change

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  • Shiyuan Pan

Abstract

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

Suggested Citation

  • Shiyuan Pan, 2013. "Financial intermediation in a model of directed technological change," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 535-553, December.
    • Handle: RePEc:kap:jecinq:v:11:y:2013:i:4:p:535-553
    DOI: 10.1007/s10888-012-9233-4
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    More about this item

    Keywords

    Financial intermediation; Skill-biased technological change; Wage inequality; Growth; O33; G21; J31;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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