Distribution and growth in an economy with limited needs: Variable markups and 'the end of work'

Gilles Saint-Paul

Research output: Contribution to journalArticle

Abstract

This article studies a model of the distribution of income under bounded needs. Utility derived from any given is bounded from above and demand is therefore not isoelastic. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a monopoly. Workers can specialise in material goods production or in the knowledge sector, which designs new varieties. As productivity increases, the economy moves from a 'Solovian zone' where wages increase with productivity, to a 'Marxian' zone where they paradoxically decline with productivity.

Original languageEnglish (US)
Pages (from-to)382-407
Number of pages26
JournalEconomic Journal
Volume116
Issue number511
DOIs
StatePublished - Apr 2006

ASJC Scopus subject areas

  • Economics and Econometrics

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