2008/08 | LEM Working Paper Series | |
Structural Change of Production and Consumption: A Micro to Macro Approach to Economic Growth and Income Distribution |
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Tommaso Ciarli, Andre Lorentz, Maria Savona, Marco Valente |
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Keywords | ||
Structural change; consumption; earnings distribution; growth.
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JEL Classifications | ||
O12, J31, L23, D11, O41
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Abstract | ||
The paper aims to analyse the effect of initial structural conditions in
the organisation and composition of production and in demand patterns,
via changes in wages distribution, as affecting economic growth and
income inequality. We develop an evolutionary model with agent-based
micro-foundations and analyse the link between structural change and
growth taking into account (i) firm-level organisational differences
and technological changes, (ii) their impact on the structure of
earnings and income of workers-consumers, and (iii) the consequent
changes in consumption. The model articulates the links between
production and organisation structures on the supply side, and the
endogenous evolution of income distribution on the demand
side. Simplied scenarios are identified via numerical simulations, in
which patterns of aggregate growth are obtained as an emerging
property of different structures of firms' organisation and production,
functional composition of employment, income distribution and patterns
of consumption.
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