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Technical progress, capital accumulation, and distribution

Naoki Yoshihara and Roberto Veneziani

No 702, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: We study the effects of innovations on income distribution in capitalist economies characterised by a drive to accumulate. Consistent with the basic intuitions of Marx’s theory of technical change, we show that there is no obvious relation between ex-ante profitable innovations and the income distribution that actually emerges in equilibrium, and individually rational choices of technique do not necessarily lead to optimal outcomes. Innovations may even cause the disappearance of all equilibria. Methodologically, it is not possible to fully understand the ‘creative destruction’ induced by innovations without capturing the dialectic between individual choices and aggregate outcomes, and the complex network of relations typical of capitalist economies.

Keywords: technical change; income distribution; profit rate (search for similar items in EconPapers)
JEL-codes: B51 D33 O33 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-hme and nep-ore
Note: with: Addendum for the paper: “Technical progress, capital accumulation, and distribution”
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Working Paper: Technical progress, capital accumulation, and distribution (2019) Downloads
Working Paper: Technical progress, capital accumulation, and distribution (2019) Downloads
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