Welfare consequences of asymmetric growth

Daniel Murphy ()

Journal of Economic Behavior & Organization, 2016, vol. 126, issue PA, 1-17

Abstract: Standard models in macroeconomics and development economics imply that growth in the aggregate enhances welfare for everyone in the economy. I show that instead, if economic growth is biased toward the consumption bundle of the rich, the welfare of the poor may fall. I document the relevance of this mechanism during the latter part of the Twentieth Century by showing that new information technology disproportionately benefited sectors consumed by the rich.

Keywords: Welfare; Sector-biased growth (search for similar items in EconPapers)
JEL-codes: D60 J24 O41 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:126:y:2016:i:pa:p:1-17

DOI: 10.1016/j.jebo.2016.02.003

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