Contents

Abstract 1596

Keywords 1596

Introduction 1597

1. Inequality, redistribution and growth 1600

1.1. Production, preferences and policy 1601

1.2. Distributional dynamics and aggregate growth 1603

1.3.

2. Sustainable social contracts 1609

2.1. Dynamics and steady states 1609

2.2. Which societies grow faster? 1611

3. Technology and the social contract 1612

3.1. Exogenous technical change and the viability of the welfare state 1613

3.2. Skills, technology and income inequality 1618

3.3. Technologicalchoiceandendogenousflexibility 1619

4. Endogenous institutions and endogenous technology 1623

5. Exporting inequality: Spillovers between social contracts 1627

5.1. A shift in one country's technological frontier 1628

5.2. A shift in one country's political institutions 1629

6. Conclusion 1629

Acknowledgements 1630

Appendix: Proofs 1630

References 1635