This paper studies the impact of income inequality on the level of innovative activity in a model where innovations result in quality improvements. The market for quality goods is characterized by a natural oligopoly with two types of consumers – rich and poor. In general, we find that for...

This paper analyses the impact of inequality on growth when technical progress is driven by innovations. It is assumed that consumers have hierarchic preferences. As a result inequality affects demand and therefore the incentive to innovate. Whether more inequality is harmful or beneficial for...

We present a model in which two of the most important features of the long-run growth process are reconciled: the massive changes in the structure of production and employment; and the Kaldor facts of economic growth. We assume that households expand their consumption along a hierarchy of needs...

This paper examines patent protection in an endogenous-growth model. Our aim is two-fold. First, we show how the patent policies discussed by the recent patent-design literature can influence R&D in the endogenous-growth framework, where the role of patents has been largely ignored. Second, we...

We present a model in which workers have to be educated to get employed and firms have to innovate in order to increase productivity. Education as well as innovation and production require skilled labour as inputs. This and the fact that learning opportunities differ across workers determine...

We utilize Schmookler’s (1966) concept of demand-induced invention to study the role of income inequality in an endogenous growth model. As rich consumers can satisfy more wants than poor consumers, both prices and market sizes for new products, as well as their evolution over time, are...