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The economics of the light economy. Globalization, skill biased technological change and slow growth

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  • Antonelli,Cristiano

    ()

  • Fassio, Claudio

    ()
    (University of Turin)

Abstract

The paper provides an interpretative framework and structured empirical evidence of the processes leading to the emergence of a light and slow growth economy in advanced countries. The interpretative framework rests upon the grafting of a) the Schumpeterian hypothesis about the determinants of the rate of technological change with b) the Kuznets approach on the strict complem entarity of structural and technological change, and c) the new approach about the direction of technological change biased towards the most intensive use of locally abundant production factors, into d) the dynamic version of the Heckesher-Ohlin analysis of international economics that accounts the introduction of new technologies as the endogenous search for a new specialization. The analysis of the stylized facts and the empirical evidence confirms that the twin globalization of product and capital markets brought about by the entry of new labor abundant countries in international markets had profound effects on advanced countries leading to the introduction of skill biased technological change with the consequent decline of the role of the manufacturing industry and the emergence of a strong knowledge intensive business service sector. The new biased direction of technological change accelerated the substitution of both capital and unskilled labor with skilled workers with the ultimate effect of reducing the stock of working capital and hence the rates of growth of advanced economies. The slow growth is a physiological feature of the new emerging light economies that rely upon knowledge intensive but capital saving technologies.

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Bibliographic Info

Paper provided by University of Turin in its series Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo Alberto. WP series with number 201305.

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Length: 58 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:uto:labeco:201305

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  1. Acemoglu, D. & Zilibotti, F., 1998. "Productivity Differences," Papers 660, Stockholm - International Economic Studies.
  2. Daron Acemoglu, 2000. "Labor- and Capital- Augmenting Technical Change," NBER Working Papers 7544, National Bureau of Economic Research, Inc.
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  8. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  9. Carol Corrado & Charles Hulten & Daniel Sichel, 2006. "Intangible capital and economic growth," Finance and Economics Discussion Series 2006-24, Board of Governors of the Federal Reserve System (U.S.).
  10. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
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  12. Antonelli Cristiano & Fassio Claudio, 2011. "Globalization and innovation in advanced economies," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201108, University of Turin.
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