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Inequality, Market Power, and Product Diversity

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Author Info
Reto Foellmi
Josef Zweimueller

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Abstract

We analyze a macroeconomic model of monopolistic competition in which consumers earn unequal incomes. When preferences are non-homothetic, the distribution of income affects equilibrium mark-ups and equilibrium product diversity.

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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp145.

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Handle: RePEc:zur:iewwpx:145

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Related research
Keywords: inequality; mark-ups; monopolistic competition;

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Find related papers by JEL classification:
D30 - Microeconomics - - Distribution - - - General
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Zweimuller, Josef, 2000. " Schumpeterian Entrepreneurs Meet Engel's Law: The Impact of Inequality on Innovation-Driven Growth," Journal of Economic Growth, Springer, vol. 5(2), pages 185-206, June. [Downloadable!] (restricted)
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  2. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1988. "Income Distribution, Market Size, and Industrialization," NBER Working Papers 2709, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Falkinger, Josef, 1994. "An Engelian model of growth and innovation with hierarchic consumer demand and unequal incomes," Ricerche Economiche, Elsevier, vol. 48(2), pages 123-139, June. [Downloadable!] (restricted)
  4. Gilles Saint-Paul, 2001. "Distribution and Growth in an Economy with Limited Needs," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  5. Bertola, Giuseppe, 2000. "Macroeconomics of distribution and growth," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 9, pages 477-540 Elsevier. [Downloadable!] (restricted)
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  6. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

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  14. Nico Voigtländer & Joachim Voth, 2005. "Why England? Demand, Growth and Inequality During the Industrial Revolution," Economics Working Papers 857, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2006. [Downloadable!]
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