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Does trade and technology transmission facilitate convergence? The role of technology adoption in reducing the inequality of nations

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  • Gouranga Gopal Das

Abstract

Based on stylized evidence showing variation of the Gini coefficients of income inequality across skill cohorts with the rapid rise in trade in technology-intensive goods, the transmission effects of technology diffusion and income inequality are explored in a global Computable General Equilibrium (CGE) framework. An exogenous technology shock transmitted via trade from the United States induces productivity growth in developing regions. This spillover in technology - aided by absorptive capability, better governance and institutions, technological symmetry and social acceptance - causes income to increase and income inequality to decline. The transmission of technology facilitates convergence of inequality between nations.

Suggested Citation

  • Gouranga Gopal Das, 2008. "Does trade and technology transmission facilitate convergence? The role of technology adoption in reducing the inequality of nations," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 11(1), pages 67-92.
  • Handle: RePEc:taf:jpolrf:v:11:y:2008:i:1:p:67-92 DOI: 10.1080/17487870802134942
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