While most established theories have difficulties in accounting for this development, theories allowing for “superstar” phenomena are consistent with it. Superstar phenomena arise, for example, when changes in technology make it possible for entrepreneurs or managers who are a little better than others at any given task to capture a much higher share of the market and of income.
I have spent much of my time today talking about the aspects of Benjamin’s work that are particularly relevant for monetary policy. However, he has expanded our knowledge in an impressive range of other areas which I did not have time to discuss, including determinants of incomes across countries, the allocation of resources, human capital accumulation, and saving and wealth inequality.