Structural Change of Production and Consumption: A Micro to Macro Approach to Economic Growth and Income Distribution
Author(s)
Ciarli, Tommaso
Lorentz, Andre
Savona, Maria
Valente, Marco
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Abstract
We propose a theoretical model/framework for the analysis of the concomitant effects of
structural changes in both production and consumption, on long run economic growth and
income distribution.
To accomplish with such a broad aim, we develop an evolutionary model with agent–based
micro–foundations. At the core of the model we take into account: (i) firm–level organisational
structure and technological changes; (ii) the impact of technology and organisation on
the structure of earnings and income of workers/consumers; and (iii) the consequent changes
in consumption patterns. The model thus articulates the links between production and organisation
structures on the supply side, and the endogenous evolution of income distribution
and consumption patterns on the demand side.
We first analyse the model’s properties, via numerical simulations, for a given setting
of the structural conditions; we graphically show that the main determinants of endogenous
economic growth and take–off are the structural variables. We then analyse the space of the
parameters that determine the structural conditions; simplified scenarios are identified via
numerical simulations, in which patterns of aggregate growth are obtained as an emerging
property of different structures of firms’ organisation and production, functional composition
of employment, income distribution and patterns of consumption.
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Date
2008-09
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Text
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Proceedings