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Technological change and the wealth of nations

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  • Gino Gancia

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  • Fabrizio Zilibotti

Abstract

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/1125.pdf
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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1125.

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Date of creation: Oct 2008
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Handle: RePEc:upf:upfgen:1125

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Web page: http://www.econ.upf.edu/

Related research

Keywords: Barriers to Technology Adoption; Directed Technology Adoption; Endogenous Growth; Globalization; Human Capital; Inappropriate Technologies; Market Power; Political Economy; Skill-biased Technical Chan;

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