Superstar Knowledge-products in a Model of Growth Superstar Knowledge-products in a Model of Growth

This paper develops a hedonic-price growth model where Superstar rewards induce patterns of innovation, learning, and income mobility and inequality. The model provides one formalization of how consumer attitudes towards knowledge-like goods (e.g., computer software) influence the latter’s creation and dissemination, and thereby economic growth and income distribution dynamics. The model can be viewed as applying: (i) across producers and consumers within developed or developing economies; or (ii) to the process of knowledge dissemination from developed to developing countries. The model generates dynamics consistent with particular features of actual crosscountry income distribution dynamics.