The Market Economy with Mass Production

As technological change accelerates, and mass production encompasses more sectors, their inherent inefficiencies and inequities become more prevalent in the aggregate economy. The resulting mass market economy can be described as the combination of a large scale, innovative leading sector under monopolistic competition, with a small scale competitive sector made of millions of firms absorbing technologies, whose productivity lags behind. Innovation profits concentrate on a few owners of large scale innovation, while the economy-wide wage level reflects the lagging average technological level. Innovative-distributive policies exist and are necessary for raising equality and approximating efficiency. Cointegration and weak exogeneity results for the US states from 1997 to 2011 corroborate the large scale sector drives aggregate employment and wages