IDEAS home Printed from https://ideas.repec.org/a/spr/joevec/v33y2023i5d10.1007_s00191-023-00843-5.html
   My bibliography  Save this article

Long waves, paradigm shifts, and income distribution, 1929–2010 and afterwards

Author

Listed:
  • Adrian Espinosa-Gracia

    (University of Zaragoza (Spain))

  • Julio Sánchez-Chóliz

    (University of Zaragoza (Spain)
    AgriFood Institute of Aragón (IA2))

Abstract

The way income is distributed in an economy is perhaps the most notable result of its growth patterns. Understanding the joint persistence of economic crises and changes in social inequality since 1929 is considered a great challenge. This paper tries to analyze growth and income distribution in the long run using the concept of long waves, the evolutionary concept of ‘systems’, and empirical information. We conjecture that the social system is in turn an outcome of the co-evolution of four partially autonomous subdomains: (i) technology, characterized by a paradigm whose evolution follows the shape of a ‘Schumpeterian boom’; (ii) the economy or productive system, essentially defined as the succession of intermediate-length fluctuations in investments, and strongly associated to sectoral and structural changes; (iii) science, which contributes to development by generating innovations; and (iv) institutions, which set the rules in which income distribution is framed. Following this scheme, the data reveal that income distribution is an emerging result from this ‘global social system’ and not only the result of economic productivity and technology; apparently, the weight in the income distribution of institutional factors is as relevant as economic and technological factors. Second, the long-run growth trends are most possibly non-linear and, to great extent, non-deterministic, which would support the representation of long-run phenomena as long waves. Finally, we have found that in the long period 1929–2010 and afterwards, two sub-periods are manifested, with very different regimes of income distribution: (1) 1929–1975, when inequality decreased, and (2) from 1975 to present time, when inequality increased. Concerning the years after 2010, two alternatives follow: either these correspond to the recovery phase of a new long wave, or to the end of the depression phase of our second period. In both cases, we are currently moving towards the expansionary phase of a new long wave, which will have important implications for contemporary economic policies.

Suggested Citation

  • Adrian Espinosa-Gracia & Julio Sánchez-Chóliz, 2023. "Long waves, paradigm shifts, and income distribution, 1929–2010 and afterwards," Journal of Evolutionary Economics, Springer, vol. 33(5), pages 1365-1396, November.
  • Handle: RePEc:spr:joevec:v:33:y:2023:i:5:d:10.1007_s00191-023-00843-5
    DOI: 10.1007/s00191-023-00843-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00191-023-00843-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s00191-023-00843-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. James H. Stock & Mark W. Watson, 2003. "Has the Business Cycle Changed? Evidence and Explanations," Working Papers 2003-2, Princeton University. Economics Department..
    3. Barry Z. Cynamon & Steven M. Fazzari, 2016. "Inequality, the Great Recession and slow recovery," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 373-399.
    4. François Bourguignon, 1990. "Growth and Inequality in the Dual Model of Development: The Role of Demand Factors," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 215-228.
    5. Pasinetti,Luigi, 1993. "Structural Economic Dynamics," Cambridge Books, Cambridge University Press, number 9780521432825, June.
    6. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
    7. Francisco Louçã, 2021. "As time went by - why is the long wave so long?," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 749-771, July.
    8. Alessandro Caiani & Alberto Russo & Mauro Gallegati, 2019. "Does inequality hamper innovation and growth? An AB-SFC analysis," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 177-228, March.
    9. Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056, Decembrie.
    10. Klepper, Steven & Simons, Kenneth L., 2005. "Industry shakeouts and technological change," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 23-43, February.
    11. Carpa, Nur & Martínez-Zarzoso, Inmaculada, 2022. "The impact of global value chain participation on income inequality," International Economics, Elsevier, vol. 169(C), pages 269-290.
    12. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    13. Steven Klepper, 2002. "Firm Survival and the Evolution of Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 37-61, Spring.
    14. Harcourt,G. C. With contributions by-Name:Cohen,Avi J. With contributions by-Name:Mata,Tiago, 2022. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9781009158152, Enero.
    15. James H. Stock & Mark W. Watson, 2003. "Has the Business Cycle Changed and Why?," NBER Chapters, in: NBER Macroeconomics Annual 2002, Volume 17, pages 159-230, National Bureau of Economic Research, Inc.
    16. Silverberg, Gerald & Verspagen, Bart, 1995. "An Evolutionary Model of Long Term Cyclical Variations of Catching Up and Falling Behind," Journal of Evolutionary Economics, Springer, vol. 5(3), pages 209-227, September.
    17. Decancq, Koen & Decoster, André & Schokkaert, Erik, 2009. "The Evolution of World Inequality in Well-being," World Development, Elsevier, vol. 37(1), pages 11-25, January.
    18. Francisco Fatás-Villafranca & Gloria Jarne & Julio Sánchez-Chóliz, 2012. "Innovation, cycles and growth," Journal of Evolutionary Economics, Springer, vol. 22(2), pages 207-233, April.
    19. Casper VAN Ewijk, 1982. "A Spectral Analysis Of The Kondratieff‐Cycle," Kyklos, Wiley Blackwell, vol. 35(3), pages 468-499, August.
    20. Giovanni Dosi, 1984. "Technical Change and Industrial Transformation: The Patterns of Industrial Dynamics," Palgrave Macmillan Books, in: Technical Change and Industrial Transformation, chapter 3, pages 86-217, Palgrave Macmillan.
    21. repec:bla:revinw:v:39:y:1993:i:2:p:121-39 is not listed on IDEAS
    22. Pasquale Tridico, 2018. "The determinants of income inequality in OECD countries [Political partisanship and welfare state reform in advanced industrial societies]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(4), pages 1009-1042.
    23. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    24. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    25. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    26. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, April.
    27. Sen, Amartya, 1995. "Inequality Reexamined," OUP Catalogue, Oxford University Press, number 9780198289289, Decembrie.
    28. repec:bla:kyklos:v:35:y:1982:i:3:p:468-99 is not listed on IDEAS
    29. Marco Gallegati, 2019. "A system for dating long wave phases in economic development," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 803-822, July.
    30. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
    31. Nelson, Richard R., 2008. "What enables rapid economic progress: What are the needed institutions," Research Policy, Elsevier, vol. 37(1), pages 1-11, February.
    32. Giovanni Dosi, 1984. "Technical Change and Industrial Transformation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-17521-5, May.
    33. Nanak Kakwani, 1993. "Poverty And Economic Growth With Application To Côte D'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    34. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.
    2. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    3. Jun, Bogang & Kim, Tai-Yoo, 2015. "A neo-Schumpeterian perspective on the analytical macroeconomic framework: The expanded reproduction system," Hohenheim Discussion Papers in Business, Economics and Social Sciences 11-2015, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    4. Alejandro Diaz-Bautista, 2005. "Regional Convergence of Income and Labor Productivity in Mexico," Urban/Regional 0512016, University Library of Munich, Germany.
    5. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    6. Mariusz Próchniak & Bartosz Witkowski, 2006. "Modelowanie realnej konwergencji w skali międzynarodowej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 1-31.
    7. Xavier Sala-i-Martin, 1990. "Lecture Notes on Economic Growth(I): Introduction to the Literature and Neoclassical Models," NBER Working Papers 3563, National Bureau of Economic Research, Inc.
    8. Ikonen, Pasi, 2010. "Effect of finance on growth through more efficient utilization of technological innovations," Bank of Finland Research Discussion Papers 21/2010, Bank of Finland.
    9. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    10. Sedat Alataş & Erkam Sarı, 2021. "An Empirical Investigation on Regional Disparities in Public Expenditures: Province Level Evidence from Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(1), pages 217-240, November.
    11. repec:ebl:ecbull:v:2:y:2002:i:1:p:1-15 is not listed on IDEAS
    12. Alogoskoufis, G.S. & van der Ploeg, F., 1991. "Money and growth revisited," Discussion Paper 1991-9, Tilburg University, Center for Economic Research.
    13. Singh, Tarlok, 2010. "Does domestic saving cause economic growth? A time-series evidence from India," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 231-253, March.
    14. repec:zbw:bofrdp:2010_021 is not listed on IDEAS
    15. Paul Lau, Sau-Him, 1999. "I(0) In, integration and cointegration out:: Time series properties of endogenous growth models," Journal of Econometrics, Elsevier, vol. 93(1), pages 1-24, November.
    16. Thomas M. Steger, 2000. "Productive Consumption and Growth in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 4(3), pages 365-375, October.
    17. Michael Peneder & Karl Aiginger & Gernot Hutschenreiter & Markus Marterbauer, 2001. "Structural Change and Economic Growth," WIFO Studies, WIFO, number 20668, August.
    18. Fernandes, Leonardo H.S. & de Araújo, Fernando H.A. & Silva, Igor E.M. & Neto, Jusie S.P., 2021. "Macroeconophysics indicator of economic efficiency," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 573(C).
    19. Burcu ŞENALP, 2018. "Foreign Direct Investment, Economic Growth and Economic Freedom: A Literature Survey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 68(2), pages 301-336, December.
    20. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342, August.
    21. Frédéric Lordon, 1991. "Théorie de la croissance : quelques développements récents [Deuxième partie : la redécouverte des rendements croissants]," Revue de l'OFCE, Programme National Persée, vol. 37(1), pages 191-243.
    22. Ali, Amjad, 2022. "Financial Liberalization, Institutional Quality and Economic Growth Nexus: Panel Analysis of African Countries," MPRA Paper 116101, University Library of Munich, Germany.

    More about this item

    Keywords

    Income distribution; Evolutionary dynamics; Long waves; Techno-economic paradigm;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    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:spr:joevec:v:33:y:2023:i:5:d:10.1007_s00191-023-00843-5. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.