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Technical progress, capital accumulation, and distribution

Author

Listed:
  • Naoki Yoshihara

    (University of Massachusetts Amherst)

  • Roberto Veneziani

    (Queen Mary University London)

Abstract

We study the effects of innovations on income distribution in capitalist economies characterised by a drive to accumulate. Consistent with the basic intuitions of Marx's theory of technical change, we show that there is no obvious relation between ex-ante profitable innovations and the income distribution that actually emerges in equilibrium, and individually rational choices of technique do not necessarily lead to optimal outcomes. Innovations may even cause the disappearance of all equilibria. Methodologically, it is not possible to fully understand the 'creative destruction' induced by innovations without capturing the dialectic between individual choices and aggregate outcomes, and the complex network of relations typical of capitalist economies.

Suggested Citation

  • Naoki Yoshihara & Roberto Veneziani, 2019. "Technical progress, capital accumulation, and distribution," Working Papers 899, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:899
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    References listed on IDEAS

    as
    1. Allen, Robert C., 2011. "Global Economic History: A Very Short Introduction," OUP Catalogue, Oxford University Press, number 9780199596652.
    2. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676, September.
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    More about this item

    Keywords

    technical change; income distribution; profit rate;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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