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The complex inequality-innovation-public investment nexus: what we (don’t) know, what we should know, and what we have to do

The complex inequality-innovation-public investment nexus: what we (don’t) know, what we should know, and what we have to do

Alberto, Botta (2016) The complex inequality-innovation-public investment nexus: what we (don’t) know, what we should know, and what we have to do. Forum for Social Economics, 46 (3). pp. 275-298. ISSN 0736-0932 (Print), 1874-6381 (Online) (doi:10.1080/07360932.2016.1150867)

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Abstract

In this paper, we deal with the complex relationship connecting inequality to innovation, and the ways through which public investment can affect it. We first stress that inequality and innovation may interact in many different ways. The positive relation that part of the economic theory often assumes to exist between (initially) rising inequality and improving innovation performances emerges as only one among many other far less virtuous dynamic trajectories. We then analyse the specific case of the US. We put emphasis on the possible perverse effects that the financialization of the US economy may have on the inequality–innovation nexus. We note that the US developmental state—very often neglected by the economic literature—can effectively mitigate such undesirable outcomes. According to our interpretation of recent developments in the US economy, the widespread belief in the positive pro-innovation effects of fierce cut-throat remuneration systems may prove to be ungrounded.

Item Type: Article
Uncontrolled Keywords: Inequality, Innovation, Financialization, Public Investment, Developmental state
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JK Political institutions (United States)
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 01 Aug 2017 16:12
Selected for GREAT 2016: None
Selected for GREAT 2017: GREAT c
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/15387

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