A Neo-Kaleckian model of skill-biased technological change and income distribution*
  • 1 Economic Commission for Latin America and the Caribbean, Santiago, Chile
  • | 2 Faculty of Economics, Federal University of Minas Gerais, Belo Horizonte, Brazil

This article proposes a macrodynamic model that takes into account the joint determination of intra-working-class income distribution and knowledge-intensive technological change. Our model highlights two opposing effects of technological change at play: (i) technological innovation promotes a positive structural change and hence boosts net exports and output growth; (ii) technological change, on the other hand, disproportionately affects unskilled workers, which worsens the intra-working-class income distribution and slows down economic growth. Therefore, our model demonstrates that the net impact of technological change on capital accumulation and output growth is ambiguous and hence is a parametric question. Lastly, we show that income transfer and public investments in higher education may be of paramount importance to alleviating the unwanted effects of a contractionary wave of technological change and so promoting a sustained economic recovery.

Contributor Notes

We are grateful to Gilberto Lima, Gabriel Porcile, Gary Dimsky, Joanilio Teixeira, and two anonymous referees for useful comments and suggestions. The usual disclaimer applies.

Corresponding author: email: martinsneto.as@gmail.com.

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