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A Note On Skill-Structure Shocks, The Share Of The High-Tech Sector, And Economic Growth Dynamics

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  • Gil, Pedro Mazeda
  • Afonso, Oscar
  • Vasconcelos, Paulo B.

Abstract

By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the shares of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a positive shock in the proportion of high-skilled labor, the technological-knowledge bias channel leads to unbalanced sectoral growth with a noticeable shift of resources across sectors. A calibration exercise suggests that the model is able to account for up to from 50 to about 100 percent of the increase in the share of the high-tech sector observed in the data from 1995 to 2007. However, the model predicts that the dynamics of the share of the high-tech sector has no significant impact on the dynamics of the economic growth rate.

Suggested Citation

  • Gil, Pedro Mazeda & Afonso, Oscar & Vasconcelos, Paulo B., 2016. "A Note On Skill-Structure Shocks, The Share Of The High-Tech Sector, And Economic Growth Dynamics," Macroeconomic Dynamics, Cambridge University Press, vol. 20(7), pages 1906-1923, October.
    • Handle: RePEc:cup:macdyn:v:20:y:2016:i:07:p:1906-1923_00
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