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Technical progress, capital accumulation, and distribution

Naoki Yoshihara and Roberto Veneziani
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Naoki Yoshihara: University of Massachusetts Amherst

No 899, Working Papers from Queen Mary University of London, School of Economics and Finance

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 (search for similar items in EconPapers)
Date: 2019-11-22
New Economics Papers: this item is included in nep-hme, nep-ore and nep-pke
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