Giulia Felice
Inequality and growth in a model with uneven technological spillovers and non-homothetic preferences

Abstract:We investigate the relationship between an initially unequal wealth distribution and aggregate growth. For this purpose, we consider a two sector economy with two consumption goods and uneven technological spillovers. In this framework we incorporate heterogeneity in the initial endowments of the accumulated factor of production of agents with identical non-homothetic preferences. We study how inequality affects the aggregate growth rate through the effects on the saving rate and those on the expenditure composition.

JEL: O41, D31, D91.
Keywords: Balanced growth, structural change, non-homothetic preferences, income distribution.



Download Full Text