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Structural Change and Inequality

DOI: 10.4236/tel.2021.113026, PP. 391-403

Keywords: Structural Change, Income Distribution, Economic Growth

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Abstract:

We build a theoretical model of demand-driven structural change where individuals have different endowments of productive factors. These differences in endowments generate income inequality. The main result is that for economies with a low factor endowment (poor economies), an increase in inequality can accelerate structural change.

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