Is inequality the price to pay for higher growth in middle-income countries?

Journal of Evolutionary Economics - Tập 20 - Trang 265-306 - 2009
Gianluca Grimalda1,2, Marco Vivarelli2,3,4,5
1IN+ Center for Innovation, Technology and Policy Research, Instituto Superior Técnico, Lisbon, Portugal
2Centre for the Study of Globalisation and Regionalisation (CSGR), Warwick University, Coventry, UK
3Facolta’ di Economia, Universita’ Cattolica, Piacenza, Italy
4IZA, Bonn, Germany
5Max Planck Institute, Jena, Germany

Tóm tắt

An evolutionary two-sector model is used to study the impact of skill-biased technological change on the growth and inequality paths of a middle-income developing economy. We present four scenarios resulting from changes in a country’s structural conditions and the characteristics of the shock. We show that wage inequality is neither a necessary nor a sufficient condition for growth. A Kuznets dynamic may emerge in the long run in the case of successful catching-up to the high-growth steady state. However, this only happens if adjustment costs significantly hamper the process of skill upgrade. The business cycle and the process of structural change may give rise to sizeable rises in wage inequality in the short term, even when the economy does not break out from the low-growth steady state.

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