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Learning-Driven Product Cycles, New Product Adoption and North-South Inequality

Author

Listed:
  • Michael Benarroch

    (Department of Economics, University of Winnipeg)

  • James Gaisford

    (Department of Economics, University of Calgary)

Abstract

This paper examines how key product-cycle parameters, such as the ease of new product adoption and the pace of product obsolescence, influence North-South wage inequality and the trade pattern. An innovative feature of the paper is in modeling the interaction between endogenous Northern product innovation and endogenous production transfers to South with industry specific learning, cross-industry learning spillovers, and product obsolescence. Greater difficulty in adopting new products raises wage inequality while lowering Northern innovation and Southern learning rates. Slowing the pace of product obsolescence reduces wage inequality in the short run, but does the opposite in the long run.

Suggested Citation

  • Michael Benarroch & James Gaisford, 2002. "Learning-Driven Product Cycles, New Product Adoption and North-South Inequality," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(1), pages 1-23, June.
    • Handle: RePEc:jed:journl:v:27:y:2002:i:1:p:1-23
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    References listed on IDEAS

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