Reconciling Micro- and Macroeconomics: The Interaction of Innovations, Imitations and Personal Income Distribution
- 1 Bundeswehr University, Munich, Germany
Abstract
The paper is a successor of original papers presented previously by Blümle ( 1989 ) and Sell ( 20 20 ) . Drawing on insights provided already by Enrico Barone in the 1930’s, we establish a relationship between the distribution of personal incomes and the activities of innovation and imitation. The model we set up may be taken both as a microeconomic and/or a macroeconomic contribution. On the micro level, champion firms like Google, Amazon, Microsoft or Facebook generate fabulous innovations which are accompanied by large profits and, at the same time, an intra-firm concentration of wages and salaries (including bonuses). On the macro level, the upper (lower) swing of the business cycle goes hand in hand with a rising (falling) profit quota/a higher (lower) inter-firm slope of earnings, created to a large extent by innovative Schumpeterian monopolists (imitative entrepreneurs). Finally, we want to find some empirical evidence for our theoretical results. The work concludes with a summary of our exposition along with some thoughts about policy implications.
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