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Technological Progress and Income Inequality


  • Karni, Edi
  • Zilcha, Itzhak


This paper examines the effects of Hicks-neutral, Harrod-neutral, and Solow-neutral technological improvements on the distribution of income in an overlapping generations economy with endogenous labor supply and a bequest motive. Income inequality in this model is generated by a stochastic process representing random variations in intergenerational transfers and pure luck. The comparative dynamics analysis trace the effects of the aforementioned technological changes in each and every period after they occur. These effects depend on the nature of the technological change and on the elasticity of substitution.

Suggested Citation

  • Karni, Edi & Zilcha, Itzhak, 1995. "Technological Progress and Income Inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 277-294, March.
  • Handle: RePEc:spr:joecth:v:5:y:1995:i:2:p:277-94

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    References listed on IDEAS

    1. H. Reiju Mihara, 2000. "Coalitionally strategyproof functions depend only on the most-preferred alternatives," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(3), pages 393-402.
    2. B. Fine & K. Fine, 1974. "Social Choice and Individual Rankings II," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 459-475.
    3. Biung-Ghi Ju, 2005. "An efficiency characterization of plurality social choice on simple preference domains," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(1), pages 115-128, July.
    4. Thomson, W., 1996. "Consistent Allocation Rules," RCER Working Papers 418, University of Rochester - Center for Economic Research (RCER).
    5. Barbera, Salvador & Sonnenschein, Hugo & Zhou, Lin, 1991. "Voting by Committees," Econometrica, Econometric Society, vol. 59(3), pages 595-609, May.
    6. B. Fine & K. Fine, 1974. "Social Choice and Individual Ranking I," Review of Economic Studies, Oxford University Press, vol. 41(3), pages 303-322.
    7. Young, H. P., 1974. "An axiomatization of Borda's rule," Journal of Economic Theory, Elsevier, vol. 9(1), pages 43-52, September.
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    Cited by:

    1. Zilcha, Itzhak, 2003. "Intergenerational transfers, production and income distribution," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 489-513, March.
    2. Yoshinori Kurokawa, 2011. "Variety-skill complementarity: a simple resolution of the trade-wage inequality anomaly," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(2), pages 297-325, February.
    3. Ronald Fischer, 1999. "Income distribution and Trade Liberalization," Documentos de Trabajo 67, Centro de Economía Aplicada, Universidad de Chile.
    4. Kaganovich, Michael & Zilcha, Itzhak, 2012. "Pay-as-you-go or funded social security? A general equilibrium comparison," Journal of Economic Dynamics and Control, Elsevier, vol. 36(4), pages 455-467.
    5. Joao Ricardo Faria & Miguel A. Leon-Ledesma, 2004. "Habit formation, work ethics and technological progress," Manchester School, University of Manchester, vol. 72(3), pages 403-413, June.

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