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Welfare consequences of asymmetric growth

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  • Murphy, Daniel

Abstract

Standard models in macroeconomics and development economics imply that growth in the aggregate enhances welfare for everyone in the economy. I show that instead, if economic growth is biased toward the consumption bundle of the rich, the welfare of the poor may fall. I document the relevance of this mechanism during the latter part of the Twentieth Century by showing that new information technology disproportionately benefited sectors consumed by the rich.

Suggested Citation

  • Murphy, Daniel, 2016. "Welfare consequences of asymmetric growth," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 1-17.
    • Handle: RePEc:eee:jeborg:v:126:y:2016:i:pa:p:1-17
    DOI: 10.1016/j.jebo.2016.02.003
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    References listed on IDEAS

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    1. Ariel J. Binder & John Bound, 2019. "The Declining Labor Market Prospects of Less-Educated Men," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 163-190, Spring.
    2. Murphy, Daniel, 2024. "Housing cycles and gentrification," Journal of Monetary Economics, Elsevier, vol. 144(C).

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    More about this item

    Keywords

    Welfare; Sector-biased growth;

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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