The Paradox of Technological Progress, Growth, Distribution, and Employment in a Demand-led Framework

Sasaki, Hiroaki (2024): The Paradox of Technological Progress, Growth, Distribution, and Employment in a Demand-led Framework.

Abstract

This study builds a Kaleckian model that incorporates endogenous technological progress and investigates how a change in a parameter that directly fosters technological progress affects growth and distribution. In this model, there is an optimal wage share that maximizes the technological progress rate. Accordingly, if the actual wage share can be moved to an optimal level, the economic growth rate will increase. This analysis reveals that a policy that directly promotes technological progress consequently decreases the long-run equilibrium value of the wage share, the capacity utilization rate, the employment rate, and the economic growth rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: endogenous technological progress; education; R\&D; growth and distribution
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E25 - Aggregate Factor Income Distribution; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models

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