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Income Distribution, Technical Change And The Dynamics Of International Economic Integration

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Author Info
Michael A. Landesmann
Robert Stehrer

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Abstract

This paper explores the features of a dynamic multisectoral model that focuses on the relationship between income distribution, growth and international specialization. The model is explored both for the steady-state properties and the transitory dynamics of integrated economies. Income inequality affects the patterns of growth and international specialization as the model uses non-linear Engel curves and hence different income groups are characterized by different expenditure patterns. At the same time income distribution is also reflected in the relative wage rates of skilled to unskilled workers, i.e. the skill premium, and hence the wage structure affects comparative costs of industries which have different skill intensities. The model is applied to a situation that analyses qualitatively different economic development strategies of catching-up economies (a 'Latin American' scenario and a 'East Asian' scenario). Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd.

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Article provided by Blackwell Publishing in its journal Metroeconomica.

Volume (Year): 58 (2007)
Issue (Month): 1 (02)
Pages: 45-73
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Handle: RePEc:bla:metroe:v:58:y:2007:i:1:p:45-73

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  1. Michael Landesmann & Robert Stehrer, 2006. "Goodwin’s Structural Economic Dynamics: Modelling Schumpeterian and Keynesian Insights," Working Papers 41, The Vienna Institute for International Economic Studies, wiiw. [Downloadable!]
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  2. Michael Landesmann & Robert Stehrer, 2009. "South-North Integration, Outsourcing and Skills," Research Reports 353, The Vienna Institute for International Economic Studies, wiiw. [Downloadable!]
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This page was last updated on 2009-11-22.

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