Distributional effects of technological regime changes: hysteresis, concentration and inequality dynamics

Abstract In this paper, we study the effect of different types technological regime changes on evolution industry concentration and wage inequality. Using a calibrated agent-based macroeconomic framework, Eurace@Unibi model, consider scenarios where new is characterized by finite time period more frequent respectively substantial in frontier technology compared to old regime. We show that under both scenarios, change leads an increase heterogeneity productivity firm population increased market concentration, effects are much less pronounced if differs from one with respect frequency innovations. If size jumps along trajectory, inequality has inverted U-shape large fraction workers profiting very long run high wages offered dominant high-tech firms. Finally, it shown (observable) worker skills plays important role generating these dynamic changes.