THE ECONOMY IS NOT FLAT: THE TECHNOLOGY GRADIENT IN THE MASS MARKET ECONOMY

IF 1 Q3 ECONOMICS

Global Economy Journal Pub Date : 2023-05-18 DOI:10.1142/s2194565923500112

DAVID MAYER-FOULKES, KURT A. HAFNER

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Abstract

In an industrial market economy, the interaction between monopolistic and competitive sectors results in within-country productivity differences, inequality and inefficiency. We demonstrate this using a two-sector mass market economy model. The monopolistic sector represents large-scale, mass production and is associated with innovation and market power, while the competitive sector represents small-scale production and engages instead in technological absorption. The endogenous dynamics of technological change between the two sectors generate a steady state technology gradient, with the competitive sector lagging behind. This technology gradient is a key endogenous feature of the industrial market economy, associated with economic growth, that generates inequality and inefficiency. Inequality is generated in two ways: innovation profits are concentrated among a few owners of large-scale innovation, while economy-wide wage levels reflect the lagging small-scale technological level. The model shows there are innovative-distributive policies that can increase efficiency in production, innovation, and absorption, and restore income equality, increasing wages and reducing profits. A cointegration and weak exogeneity panel study of the US states between 1997 and 2011 corroborates that the large-scale sector drives aggregate employment, wages and inequality, while top income inequality makes the technology gradient steeper.

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经济不是平坦的:大众市场经济中的技术梯度

在工业市场经济中，垄断部门和竞争部门之间的相互作用导致国内生产率差异、不平等和效率低下。我们用一个两部门的大众市场经济模型来证明这一点。垄断部门代表大规模、大量生产，与创新和市场力量有关，而竞争部门代表小规模生产，从事技术吸收。两个部门之间技术变化的内生动力产生稳态技术梯度，竞争部门落后。这种技术梯度是工业市场经济的一个关键内生特征，与经济增长有关，产生不平等和低效率。不平等通过两种方式产生:一是创新利润集中在少数大规模创新的所有者手中，二是整个经济体的工资水平反映了小规模技术水平的滞后。该模型表明，有一些创新分配政策可以提高生产、创新和吸收的效率，恢复收入平等，增加工资，减少利润。一项针对1997年至2011年美国各州的协整和弱外生性面板研究证实，大规模部门推动了总就业、工资和不平等，而最高收入不平等使技术梯度变得更陡。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Global Economy Journal ECONOMICS-

CiteScore

1.60

自引率

14.30%

发文量

期刊介绍： The GEJ seeks to publish original and innovative research, as well as novel analysis, relating to the global economy. While its main emphasis is economic, the GEJ is a multi-disciplinary journal. The GEJ''s contents mirror the diverse interests and approaches of scholars involved with the international dimensions of business, economics, finance, history, law, marketing, management, political science, and related areas. The GEJ also welcomes scholarly contributions from officials with government agencies, international agencies, and non-governmental organizations. One over-arching theme that unites IT&FA members and gives focus to this journal is the complex globalization process, involving flows of goods and services, money, people, and information.