Technological change, income distribution and unemployment

This Chapter explores the impact that a particular form of technological change, the so called induced technological change, may have on the results so far considered. In fact, induced technological change implies that it reacts to changes in wage share. The analysis proceeds along two steps. First of all, it studies the consequences on the canonical growth cycles ( particularly Goodwin and Kalecki) . Secondly, it explores the impact on the workhorse model. It serves three purposes. First of all, it provides a new specification to technological change that it is particularly useful when a structural determination of income distribution will be considered. Secondly, it gives new insights on the dynamic of unemployment. Finally, it shed new lights on the income distribution debate (IDD) because it turns out that the main properties illustrated in the previous Chapters depend also on how induced technological change is specified. Also in this case, multiple equilibria can be generated with different degrees of stability and this softens the power of the previous conclusions.