Inequality, product durability and the adoption of new technology products

Abstract

The analysis highlights how inequality and the cost of producing durability influence the degree to which new technology products are adopted in an economy. It is shown that redistribution may both increase and lower technology dispersion. If inequality is large at the outset, redistribution may lower technology dispersion. On the other hand, if inequality is low at the outset, more redistribution will be beneficial for the adoptation of new technology products. For intermediate cases the effect from redistribution is ambigious.