 Dynamic analysis of wage inequality and creative destructionNo 13-20, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Abstract: This paper investigates the transitional dynamics of a basic Schumpeterian growth model under constant relative risk aversion. In this model, there are three patterns of the evolution of wage inequality: (a) skill-biased technological change, i.e., technological progress leads to a widening of wage inequality; (b) unskill-biased technological change, i.e., technological progress leads to a contraction of wage inequality; and (c) unbiased technological change, i.e., technological progress is independent of wage inequality. By conducting comparative dynamics of an unexpected permanent increase in research productivity in any sector, which we interpret as the arrival of new general purpose technologies, we show that the property of technological change shifts entirely from unskill-biased to skill-biased. The evolution of wage inequality in the model is then consistent with that of the US economy during the period from the 1930s to the 2000s. Keywords: Endogenous growth; creative destruction; wage inequality; factor-biased technological change; general purpose technologies. (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1320 Access Statistics for this paper More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC. |
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