Kang-Kook Lee is a Professor in the College of Economics at Ritsumeikan University. His research interests encompass economic growth, inequality, financial globalization and the East Asian economy. He graduated from the Department of Economics and the Graduate School of Economics at Seoul National University. He holds a Ph.D. in economics from the University of Massachusetts, with a focus on capital account liberalization and economic development.
He published several books and numerous papers in academic journals including the Cambridge Journal of economics. As a visiting scholar, he has been affiliated with Columbia University in 2009, the University of Cambridge in 2018, and Seoul National University in 2019. He also serves as a co-editor of The Japanese Political economy.
Income Inequality and Innovation: An Empirical Analysis
In recent years, there has been serious concern about the rising income inequality and its negative effect on economic growth. Numerous theoretical and empirical studies in economics indeed report that inequality has a negative impact on economic growth. They highlight various channels, including the depression of education among poor families along with financial market failures, worsening of political conflicts and institutional development, and stagnation of aggregate demand. However, the effect of inequality on innovation has not been extensively studied yet, even though innovation and productivity growth are essential to economic growth. This paper empirically examines the effect of income inequality on innovation, measured by patents and total factor productivity growth. This paper first reviews the related literature, and discusses the potential negative relationship between inequality and innovation. It conducts an empirical analysis using cross-country data on patents, productivity growth, and income inequality in the 2000s. After controlling for several important factors affecting innovation, the study finds that inequality of income and opportunity as well are negatively associated with innovation. This suggests that we should make efforts to reduce inequality in order to promote inclusive and innovative economic growth.
