Secular Trends and Technological Progress

Arbeitspapier

We study the redistributive effects of a gradual productivity shift from tangible to intangible capital. Intangible asset creation relies on the commitment of skilled human capital. To ensure retention,firms reward innovators by deferred compensation, so funding demand by firms drops as the importance of intangible assets rises. Since human capital income is not tradable,the supply of investable assets falls and innovator rents rise.The general equilibrium effect is a fall in interest rates, while surplus savings are stored in higher asset valuations. This shift leads to increasing inequality and skewness in both the capital and labor income share.Rising house prices and wage inequality lead to higher household leverage.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECONtribute Discussion Paper ; No. 006

Classification and Topics

• Classification: Wirtschaft ; Factor Income Distribution ; Investment; Capital; Intangible Capital; Capacity ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: Intangible capital ; skill-biased technological change ; human capital ; excess savings ; house prices

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Döttling, Robin ; Perotti, Enrico
• Event: Veröffentlichung
• (who): University of Bonn and University of Cologne, Reinhard Selten Institute (RSI)
• (where): Bonn and Cologne
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/222332
• Last update: 10.03.2025, 11:43 AM CET