Why the Rich Should Like R&D Less
Series
Working Papers
Type
working paper
Date Issued
2009
Author(s)
Abstract
It is well known that research and development (R&D) is an important engine for economic growth. Also, initial wealth inequality and subsequent economic growth are well known to be related. This paper links inequality and R&D-driven growth. It shows that in a class of economies where R&D is the main engine for growth, different wealth groups differ in their desire for aggregate innovative efforts: the higher the profit share of the individual's incomes the lower their ideal aggregate R&D and innovation. If rich shareholders were able to pursue their common interest and to discourage too much R&D compared, then a pro-labour government able to impose distortionary progressive taxation, by minimizing the difference between the rich and the poor can maximize growth. Such predicted negative relationship between desired.
Language
English
Keywords
R&D and Growth; Social Preferences for Innovation; Inequality
Redistribution and Growth
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
No
Publisher
Business School - Economics, University of Glasgow
Number
2009_14,
Subject(s)
Eprints ID
222124
File(s)![Thumbnail Image]()
Name
2009_14 WP Glassgow.pdf
Size
190.8 KB
Format
Adobe PDF
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