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The Product Cycle and Inequality

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  • Boyan Jovanovic

Abstract

This paper models the product cycle and explains how it relates to world inequality. In the model, both phenomena arise because skilled people have a comparative advantage in making high-tech products. The model can explain up to a 10:1 income differential between people and up to a 7:1 differential between countries.

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File URL: http://www.nber.org/papers/w10910.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10910.

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Date of creation: Nov 2004
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Handle: RePEc:nbr:nberwo:10910

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  1. Nancy L. Stokey, 1989. "The Volume and Composition of Trade Between Rich and Poor Countries," Discussion Papers 849, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
  3. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
  4. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
  5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  6. Diego Comin & Bart Hobijn, 2004. "Neoclassical Growth and the Adoption of Technologies," NBER Working Papers 10733, National Bureau of Economic Research, Inc.
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Cited by:
  1. Marimon, Ramon & Quadrini, Vincenzo, 2006. "Competition, Innovation and Growth with Limited Commitment," CEPR Discussion Papers 5840, C.E.P.R. Discussion Papers.

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