Social conflict, growth and factor shares

Christopher Tsoukis and Frederic Tournemaine

MPRA Paper from University Library of Munich, Germany

Abstract: Standard growth theory is based on atomistic agents with no strategic interactions among them. In contrast, we model growth as resulting from a one-off, strategic game between workers and owners of capital (capitalists) on factor shares, in an otherwise standard AK growth model. The resulting distribution of income between factors further determines the marginal revenue product of capital and the rate of growth. We analyse the properties of four equilibria: competitive, Stackelberg equilibrium, a hybrid non-cooperative regime, and cooperative (Nash) solution. We show that our model provides a potentially richer view of the growth process than comparable models, and endogenises a key aspect of the social contract.

Keywords: social conflict; factor shares; growth; catching up with the Joneses (search for similar items in EconPapers)
JEL-codes: E22 E25 O41 (search for similar items in EconPapers)
Date: 2010-06-18, Revised 2010-06-20
New Economics Papers: this item is included in nep-evo and nep-fdg
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Related works:
Journal Article: SOCIAL CONFLICT, GROWTH AND FACTOR SHARES (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23365

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