Effects of monetary and R&D policies on inequality and growth: The case of South Africa

Yoseph Getachew, Richard Kima and Nyemwererai Matshaka

No wp-2025-55, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper develops a two-agent worker-capitalist heterogeneous household monetary Schumpeterian growth model to examine the effects of R&D and monetary policies on economic growth and inequality. The model is then calibrated to the South African economy, an upper-middle-income African country infamous for its consistently high level of inequality. A higher nominal interest rate reduces innovation and economic growth but help to mitigate inequality. However, the reduction in consumption inequality comes from a disproportionate decline in the capitalists' condition.

Keywords: Economic growth; Inequality; Monetary policy; Research (Technological innovations) (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-afr, nep-cba, nep-fdg, nep-gro and nep-mon
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.wider.unu.edu/sites/default/files/Publ ... ality-and-growth.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:wp-2025-55

Access Statistics for this paper

More papers in WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER) Contact information at EDIRC.
Bibliographic data for series maintained by Siméon Rapin ().