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Technological Change and the Wealth of Nations

Author

Listed:
  • Gino Gancia
  • Fabrizio Zilibotti

    (CREI and Universitat Pompeu Fabra, 08005 Barcelona, Spain
    Institute for Empirical Research in Economics, University of Zurich, CH-8006 Zürich, Switzerland)

Abstract

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization.

Suggested Citation

  • Gino Gancia & Fabrizio Zilibotti, 2009. "Technological Change and the Wealth of Nations," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 93-120, May.
    • Handle: RePEc:anr:reveco:v:1:y:2009:p:93-120
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.economics.050708.143333
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    Keywords

    technology adoption; directed technical change; inappropriate technologies; globalization; skill bias; TFP differences;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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