Schumpeterian competition in a Lucas economy

• 成果类型: Article
• 署名作者: Andrei, Daniel; Carlin, Bruce I.
• 署名单位: McGill University; Rice University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105613
• 发表日期: 2023
• 关键词: Schumpeterian competition; experimentation; Tullock contests; creative destruction; Return predictability; income inequality

摘要

We model a rent-seeking game where agents experiment with a new technology and compete for claims to a consumption stream. We characterize how creative destruction affects risk, wealth, and asset prices. Competition not only imposes excessive disruption risk on existing assets and higher technological uncer-tainty, it also increases the wealth duration (the weighted-average maturity of wealth). Because of hedging motives, a complementarity between wealth duration and technological uncertainty decreases systematic risk. If competition is sufficiently intense, a negative risk premium may arise. The model generates price paths consistent with boom-bust patterns and transient episodes of negative expected excess returns. We show that Schumpeterian competition may worsen income inequality.(c) 2023 Elsevier Inc. All reserved.