Technological Progress and Future of Kuznets Curve

Abstract

This study considers the fluctuation in the degree of income inequality after the Kuznets curve completes a single inverted U-shaped curve. It ascertains that new-born technological inventions increase the degree of inequality; however, the degree of inequality declines as the technology disperses into the overall economy using OECD members’ data. Assuming that technological progress takes place repetitively throughout long term economic growth, the Kuznets curve does not converge to a single inverted U-shaped curve. Rather, it fluctuates through technological progress where technology appears as an invention, but with time it becomes common knowledge.