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Structural Development Accounting

  • Gancia, Gino A
  • Müller, Andreas
  • Zilibotti, Fabrizio

We construct and estimate a unified model combining three of the main sources of cross-country income disparities: differences in factor endowments, barriers to technology adoption and the inappropriateness of frontier technologies to local conditions. The key components are different types of workers, distortions to capital accumulation, directed technical change, costly adoption and spillovers from the world technology frontier. Despite its parsimonious parametrization, our empirical model provides a good fit of GDP data for up to 86 countries in 1970 and 122 countries in 2000. Removing barriers to technology adoption would increase the output per worker of the average non-OECD country relative to the US from 0.19 to 0.61, while increasing skill premia in all countries. Removing barriers to trade in goods amplifies income disparities, induces skill-biased technology adoption and increases skill premia in the majority of countries. These results are reverted if trade liberalization is coupled with international IPR protection.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8254.

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Date of creation: Feb 2011
Date of revision:
Handle: RePEc:cpr:ceprdp:8254
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  1. Caselli, Francesco & Wilson, Daniel J., 2004. "Importing technology," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 1-32, January.
  2. Stephen L Parente & Edward C Prescott, 2004. "A Unified Theory of the Evolution of International Income Levels," Levine's Working Paper Archive 122247000000000300, David K. Levine.
  3. Diego Comin & Bart Hobijn, 2009. "Lobbies and Technology Diffusion," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 229-244, May.
  4. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2010. "Competing engines of growth: innovation and standardization," IEW - Working Papers 483, Institute for Empirical Research in Economics - University of Zurich.
  5. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, June.
  6. Fadinger, Harald, 2008. "Productivity Differences in an Interdependent World," MPRA Paper 7603, University Library of Munich, Germany.
  7. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 199-230, 04.
  8. Antonio Ciccone & Elias Papaioannou, 2005. "Human Capital, the Structure of Production, and Growth," Working Papers 245, Barcelona Graduate School of Economics.
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  10. Antonio Ciccone & Giovanni Peri, 2005. "Long-Run Substitutability Between More and Less Educated Workers: Evidence from U.S. States, 1950-1990," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 652-663, November.
  11. Diego A. Comin & Bart Hobijn, 2008. "An Exploration of Technology Diffusion," Harvard Business School Working Papers 08-093, Harvard Business School.
  12. Gino Gancia & Fabrizio Zilibotti, 2008. "Technological change and the wealth of nations," Economics Working Papers 1125, Department of Economics and Business, Universitat Pompeu Fabra.
  13. Jaume Ventura, 2005. "A Global View of Economic Growth," NBER Working Papers 11296, National Bureau of Economic Research, Inc.
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  15. Gancia, Gino & Bonfiglioli, Alessandra, 2008. "North-South trade and directed technical change," Journal of International Economics, Elsevier, vol. 76(2), pages 276-295, December.
  16. Diego A. Comin & William Easterly & Erick Gong, 2008. "Was the Wealth of Nations Determined in 1000 B.C.?," Harvard Business School Working Papers 09-052, Harvard Business School.
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  19. Arvind Subramanian & Devesh Roy, 2001. "Who Can Explain The Mauritian Miracle: Meade, Romer, Sachs or Rodrik?," IMF Working Papers 01/116, International Monetary Fund.
  20. Cohen, Daniel & Soto, Marcelo, 2001. "Growth and Human Capital: Good Data, Good Results," CEPR Discussion Papers 3025, C.E.P.R. Discussion Papers.
  21. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc.
  22. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170 Elsevier.
  23. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  24. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
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  26. repec:tpr:qjecon:v:116:y:2001:i:2:p:563-606 is not listed on IDEAS
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