 Class struggle in a Schumpeterian economyAngus Chu, Zonglai Kou and Xilin Wang China Economic Review, 2023, vol. 82, issue C Abstract: This study explores class struggle between workers and capitalists in a Schumpeterian economy, in which economic growth is driven by innovation in a market economy. We consider the limit on the market power of firms as a policy instrument and derive its optimal levels for workers and capitalists, respectively. Capitalists prefer powerful monopolistic firms, but even workers prefer firms to have some market power because profit provides incentives for innovation. Workers’ utility-maximizing degree of monopoly power is decreasing in their discount rate but increasing in innovation productivity and the quality step size. Capitalists’ utility-maximizing degree of monopoly power is increasing in the quality step size. We use the difference in these two degrees of monopoly power to measure the severity of their conflict, which becomes less severe when workers’ discount rate falls or innovation productivity rises. Finally, at a small (large) quality step size, enlarging it mitigates (worsens) their conflict. Keywords: Economic growth; Workers; Capitalists; Class struggle (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:82:y:2023:i:c:s1043951x2300144x DOI: 10.1016/j.chieco.2023.102059 Access Statistics for this article China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu More articles in China Economic Review from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.