Technical Progress, Market Restraint and Economic Growth

Alexandre Rands () and Analice Amazonas ()
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Alexandre Rands: Datamétrica Consultoria, Pesquisa e Telemarketing
Analice Amazonas: Datamétrica Consultoria, Pesquisa e Telemarketing
Authors registered in the RePEc Author Service: Alexandre Rands Barros ()

No 16, Working Papers from Datamétrica Consultoria Econômica

Abstract: This paper emphasizes that although technical progress is crucial for economic growth, its promotion may lead to income concentration in hands of the richest. As it demands public effort to reach its optimal level, because of the existence of several market restraints on the production of new technologies, policies designed to accelerate technical progress may have perverse effects on income distribution. This paper presents a two sector model in the endogenous growth tradition to capture rigorously these conclusions and to show that they have theoretical support from rational behaviour of agents. As a consequence of these results, public authorities should be cautious on the effective structure of such policies and assure that there are some kind of compensation for those who loose with their implementation.

Keywords: technical progress; growth; public policies. (search for similar items in EconPapers)
JEL-codes: O33 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2001, Revised 2001
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Published in Globalisation Tehcnology and Trade, 2001, p. 229-258.

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