Enterprise, Inequality and Economic Development.
We characterize an equilibrium development process driven by the interaction of the distribution of wealth with credit constraints and the distribution of entrepreneurial skills. When efficient entrepreneurs are relatively abundant, a "traditional" development process emerges in which the evolution of macroeconomic variables accord with empirical regularities and income inequality traces out a Kuznets curve. If, instead, efficient entrepreneurs are relatively scarce, the model generates long-run "distributional cycles" driven by the endogenous interaction between credit constraints, entrepreneurial efficiency and equilibrium wages. Copyright 2000 by The Review of Economic Studies Limited
Year of publication: |
2000
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Authors: | Lloyd-Ellis, Huw ; Bernhardt, Dan |
Published in: |
Review of Economic Studies. - Wiley Blackwell, ISSN 0034-6527. - Vol. 67.2000, 1, p. 147-68
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Publisher: |
Wiley Blackwell |
Saved in:
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