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Sharing Economy: Dynamic General Equilibrium Effects

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  • Nalbach, Eva

Abstract

Developments in digital technologies enabled the emergence and rapid growth of the sharing economy predicted to account for up to 5% of EU GDP in coming years. This paper contextualises these developments within a dynamic two sector model of the economy and analyses the effects of efficiency gains in the sharing sector on growth, income distribution and employment. We identify three sources of technological progress in the sharing sector and find that an expansion of this sector, in line with recent predictions, will lead to modest GDP growth and declines in both wage share and employment, if sharing is organised by profit maximising firms. We compare this solution to a case where households organise sharing directly and find that the sharing sector will be larger under the same technological conditions in the latter case.

Suggested Citation

  • Nalbach, Eva, 2018. "Sharing Economy: Dynamic General Equilibrium Effects," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181643, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc18:181643
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    References listed on IDEAS

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    1. Vasant Dhar & Arun Sundararajan, 2007. "Issues and Opinions---Information Technologies in Business: A Blueprint for Education and Research," Information Systems Research, INFORMS, vol. 18(2), pages 125-141, June.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    3. Sundararajan, Arun, 2016. "The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262034573, December.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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