EconPapers    
Economics at your fingertips  
 

Time, Quality and Growth

Francisco Alcalá ()

No 201052, Working Papers from Fundacion BBVA / BBVA Foundation

Abstract: Consumption requires time (consumption and time are complements of each other). In addition higherquality goods provide more utility per unit of time allocated to consumption, though at a higher monetary cost. Since time is limited, higher income is decreasingly spent augmenting the number of units of goods being consumed and increasingly spent upgrading their quality. After analyzing the basic microeconomics of consumer quantity/quality choices, this working paper investigates its implications on growth. As a country develops, raising the quality of output becomes increasingly important as a component of gross domestic product (GDP) growth relative to quantity growth. Furthermore technological progress is increasingly quality-biased. Lower income inequality raises the scale of output while reducing average quality. This is positive for technical progress and growth at early stages of economic development but may be negative at later stages. These results are broadly consistent with the existing empirical evidence on the composition of GDP growth, international trade patterns of vertical specialization across countries, and the nonlinearity of the impact of inequality on growth. This working paper also explores the potential role of progressive consumption taxes as a growth policy.

Keywords: Allocation of time; product quality; inequality; growth; distortionary consumption taxes. (search for similar items in EconPapers)
Pages: 58
Date: 2009-10
New Economics Papers: this item is included in nep-fdg and nep-hap
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/p ... index.jsp?codigo=436
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/publicaciones/documentos/fichadoc/index.jsp?codigo=436 [301 Moved Permanently]--> https://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/publicaciones/documentos/fichadoc/index.jsp?codigo=436)

Related works:
Working Paper: Time, Quality and Growth (2009) Downloads
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:fbb:wpaper:201052

Access Statistics for this paper

More papers in Working Papers from Fundacion BBVA / BBVA Foundation Contact information at EDIRC.
Bibliographic data for series maintained by Fundacion BBVA / BBVA Foundation ().

 
Page updated 2020-07-02
Handle: RePEc:fbb:wpaper:201052