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Income distribution, technical change and the dynamics of international economic integration

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Abstract

This paper explores the features of a dynamic multisectoral model which focuses on the relationship between income distribution, growth and international specialization. The model is explored both for the steady-state properties and the transitory dynamics of integrated economies. Income inequality affects the patterns of growth and international specialization as the model uses non-linear Engel curves and hence different income groups are characterized by different expenditure patterns. At the same time income distribution is also reflected in the relative wage rates of skilled to unskilled workers, i.e. the skill premium, and hence the wage structure affects comparative costs of industries which have different skill intensities. The model is applied to a situation which analyses qualitatively different economic development strategies of catching-up economies (a 'Latin American' scenario and a 'South East Asian' scenario).

Suggested Citation

  • Michael Landesmann & Robert Stehrer, 2005. "Income distribution, technical change and the dynamics of international economic integration," Economics working papers 2005-13, Department of Economics, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:econwp:2005_13
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    References listed on IDEAS

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    1. Vladimir Gligorov, 2004. "Debt Sustainability and Growth in Croatia," wiiw Research Reports 306, The Vienna Institute for International Economic Studies, wiiw.
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    Cited by:

    1. Michael Landesmann & Robert Stehrer, 2009. "South-North Integration, Outsourcing and Skills," wiiw Research Reports 353, The Vienna Institute for International Economic Studies, wiiw.
    2. Steingraber, Ronivaldo & Gonçalves, Flávio, 2011. "Productivity differences in Brazilian manufacturing firms, by industrial sector: school bullying and academic achievement," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Iván Arribas & Francisco Pérez & Emili Tortosa-Ausina, 2014. "The dynamics of international trade integration: 1967–2004," Empirical Economics, Springer, vol. 46(1), pages 19-41, February.
    4. Landesmann, M.A. & Stehrer, R., 2006. "Goodwin's structural economic dynamics: Modelling Schumpeterian and Keynesian insights," Structural Change and Economic Dynamics, Elsevier, vol. 17(4), pages 501-524, December.
    5. Robert Stehrer, 2005. "Employment, Education and Occupation Structures: A Framework for Forecasting," wiiw Research Reports 315, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    income distribution; growth; international economic integration; catching-up; international specialization;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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