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Learning, experience and the dynamics of north-south Trade and technology transfer

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  • Benarroch Michael
  • James Gaisford

Abstract

This paper examines the dynamics of learning and experience that underlie technology transfer using a North-South trade model with a continuum of goods. Since North is historically more experienced than South, it initially produces the most advanced goods and pays higher wages. Whenever there is a market-driven transfer of technology and production over time, there will be some wage convergence as South gradually gains experience. Nevertheless, wage inequality must persist in the steady state. Product innovation typically increases steady-state wage inequality because new goods are produced in North, and North ultimately learns than South. [F12, O19]

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Bibliographic Info

Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 16 (2002)
Issue (Month): 2 ()
Pages: 65-83

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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:65-83

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  2. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  3. Shi Heling & Yang Xiaokai, 1995. "A New Theory of Industrialization," Journal of Comparative Economics, Elsevier, vol. 20(2), pages 171-189, April.
  4. Gene M. Grossman & Elhanan Helpman, 1994. "Technology and Trade," NBER Working Papers 4926, National Bureau of Economic Research, Inc.
  5. Stiglitz, Joseph E, 1989. "Markets, Market Failures, and Development," American Economic Review, American Economic Association, vol. 79(2), pages 197-203, May.
  6. Taylor, M. Scott, 1993. "'Quality ladders' and Ricardian trade," Journal of International Economics, Elsevier, vol. 34(3-4), pages 225-243, May.
  7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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Cited by:
  1. Michael Benarroch & James Gaisford, 2001. "Export-promoting production subsidies and the dynamic gains from experience," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 10(3), pages 291-320.

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