Innovation and Growth With Rich and Poor Consumers

Zweimüller, Josef; Brunner, Johann K.

doi:10.1111/j.1467-999x.2005.00215.x

Cited by 45 publications

(21 citation statements)

References 19 publications

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“…Thus, in the New Normal, China's industrial structure upgrade shall accelerate factors allocation, and cultivate advanced manufacturing industries, etc. (Guo and Li, 2016), especially focus on the important role of innovation driver for the industrial structure optimization (Zweimuller and Brunner, 2005;Acemoglu, 2009;Acemoglu and Guerrieri, 2008;Fuceri, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

China’s Industrial Structure Upgrade in the “New Normal”: Empirical Test and Determinants

Xiao

Pan²,

Liu

2018

Singapore Econ. Rev.

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This paper measures the index of industrial structure upgrade nationally, regionally and provincially by employing angle cosine method. The results show that China’s industrial structure has upgraded and the East is higher than the Northeast and the Midwest. The paper presents an empirical study to examine the effect of variables including demand-side factors, New Normal as a dummy variable and supply-side factors on industrial structure upgrading. It implies that New Normal is not significant, while consumption, investment, technology improvement and labor supply significantly facilitate the upgrade. It highlights policy suggestions designed to adopt innovation-driven strategy and regional economy development strategy.

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Section: Literature Reviewmentioning

confidence: 99%

China’s Industrial Structure Upgrade in the “New Normal”: Empirical Test and Determinants

Xiao

Pan²,

Liu

2018

Singapore Econ. Rev.

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“…Falkinger [8] develops a model where inequality affects technical progress via aggregate output of consumer goods. The effect of inequality on technical progress in quality ladder models is explored in Li [14] and Zweimüller and Brunner [24]. 8 Jackson [15] finds that the richest income class consumed twice as many different goods as the poorest class, using micro data from the Consumer Expenditure Survey of the Bureau of Labor Statistics.…”

Section: Motivating Evidencementioning

confidence: 99%

The macroeconomics of Model T

Foellmi

Wuergler

Zweimüller

2014

Journal of Economic Theory

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We study a model of growth and mass production. Firms undertake either product innovations that introduce new luxury goods for the rich; or process innovations that transform existing luxuries into mass products for the poor. A prototypical example for such a product cycle is the automobile. Initially, an exclusive product for the very rich, the automobile became affordable to the middle class after the introduction of Ford's Model T, "the car that put America on wheels". We present a model of non-homothetic preferences, in which the rich consume a wide range of exclusive high-quality products and the poor a more narrow range of low-quality mass products. In this framework, inequality affects the composition of R&D through price and market size effects. The inequality-growth relationship depends on how mass production affects productivity; and on the particular dimension of inequality (income gaps versus income concentration). Our model is sufficiently tractable to incorporate learning-by-doing, oligopolistic market structures, and different sources of knowledge spillovers.

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“…Murphy, Shriver and Vinshny argued that the income gap in the context of heterogeneity in consumer preferences affects technological innovation in enterprises and thus affects the level of regional industrialization [20]. Zweimuller, Zeimuller and Brunner extended Murphy's model to say that the narrowing of the income gap will increase the market demand for highquality products due to the hierarchic preferences of consumers [21][22]. Subsequently, Foellmi and Zweimuller clarified the dual impact of the income gap on technological progress based on the product heterogeneity model [23].…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of income gap on the inverted U-shaped total factor productivity and its mechanisms: Evidence from transnational-level analysis

He¹,

Zhang²,

Zhong³

et al. 2020

PLoS ONE

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This paper attempts to verify the "inverted U" effect of the income gap on the total factor productivity (TFP) of the country or region by constructing a theoretical model that includes income effects and substitution effects. Based on this, this paper uses the multinational panel data of 53 countries in the world from 1995 to 2014 for empirical research. The research shows that: (1) the income gap has an "inverted U-shaped" effect on the national TFP, and the inflection point is located at about 0.269; (2) The income gap is also verified by the "inverted U" influence mechanism of the national TFP by affecting the income effect and the substitution effect; (3) The difference in the development stage determines that countries should adopt an income distribution policy that is compatible with their own country. The conclusions of this paper strengthen the confidence and determination to improve the supply system and promote regional innovation, and confirm the necessity of promoting global economic restructuring and achieving global inclusive development to a certain extent.

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Innovation and Growth With Rich and Poor Consumers

Cited by 45 publications

References 19 publications

China’s Industrial Structure Upgrade in the “New Normal”: Empirical Test and Determinants

China’s Industrial Structure Upgrade in the “New Normal”: Empirical Test and Determinants

The macroeconomics of Model T

The impact of income gap on the inverted U-shaped total factor productivity and its mechanisms: Evidence from transnational-level analysis

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