The paper articulates and tests the hypothesis that innovation is a major factor in the reduction of income inequalities. The relationship between the pace of technological change and the dynamics of income inequalities has been first suggested by Kuznets (1955), but found little elaboration and empirical investigation in the subsequent literature. The evidence of a large data set including advanced countr
ies, such as the US, Canada and the members of the European Union, as well as the newly industrializing BRIC members, in the years 1995-2011, confirms the virtuous circle between technological change and income
inequalities
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