How innovation and heterogenous human capital shape wealth and income inequality

Luca Spinesi

No 290, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: Thispaperstudieshowinteractionsbetweenheterogeneoushouse- holdsintermsofsharesofwealthowned,sharesofhumancapitaland sharesofconsumptioninuencewealthandincomeinequalityinanin- novationdrivengrowthmodelwithendogenousmarketstructure.Inno- vationandworkforceskillupdatingjointlydeterminelong-runeconomic growth,whilepatentpolicygeneratesnon-monotonicdistributionalef- fects.Moderateincreasesinpatentbreadthraise rmsvaluationsand dampenswealthandincomeinequality,whereasstrongpatentprotection increaseswealthandincomeinequality.Incontrast,greatertimedevoted toskillupdatingunambiguouslyfostersinnovationandlong-rungrowth, butalsoincreaseswealthandincomeinequality.Themodeliscalibrated toU.S.dataandshowntoreplicatekeyfeaturesofthejointevolutionof wealthandincomeinequalityovertheperiod1989-2019.

Keywords: Innovation; Endogenous market structure; Human capital; Income and Wealth (search for similar items in EconPapers)
JEL-codes: D43 J24 O30 O40 (search for similar items in EconPapers)
Pages: 81
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