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Advisor(s)
Abstract(s)
This paper studies the effects of the diffusion of a General Purpose Technology (GPT) that
spreads first within the developed North country of its origin, and then to a developing South
country. In the developed general equilibrium growth model, each final good can be produced
by one of two technologies. Each technology is characterized by a specific labor complemented
by a specific set of intermediate goods, which are enhanced periodically by Schumpeterian
R&D activities. When quality reaches a threshold level, a GPT arises in one of the technologies
and spreads first to the other technology within the North. Then, it propagates to the South,
following a similar sequence. Since diffusion is not even, neither intra- nor inter-country, the
GPT produces successive changes in the direction of technological knowledge and in inter- and
intra-country wage inequality. Through this mechanism the different observed paths of wage
inequality can be accommodated.
Description
Keywords
North-South General purpose technology Direction of technological knowledge Wage inequality
Citation
(Afonso and Bandeira, 2013)
Publisher
Hitotsubashi University