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Structural development accounting

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 Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1249.

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Date of creation: Jul 2010
Date of revision: Feb 2011
Handle: RePEc:upf:upfgen:1249
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  1. 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.
  2. Diego Comin & Bart Hobijn, 2009. "Lobbies and Technology Diffusion," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 229-244, May.
  3. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
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  5. Antonio Ciccone & Giovanni Peri, 2004. "Long-run substitutability between more and less educated workers: Evidence from U.S. States 1950-1990," Economics Working Papers 764, Department of Economics and Business, Universitat Pompeu Fabra.
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  8. Francesco Caselli & Wilbur John Coleman II, 2000. "The World Technology Frontier," NBER Working Papers 7904, National Bureau of Economic Research, Inc.
  9. Diego A. Comin & Bart Hobijn, 2008. "An Exploration of Technology Diffusion," Harvard Business School Working Papers 08-093, Harvard Business School.
  10. Jaume Ventura, 2005. "A Global View of Economic Growth," NBER Working Papers 11296, National Bureau of Economic Research, Inc.
  11. Ciccone, Antonio & Papaioannou, Elias, 2005. "Human Capital, the Structure of Production, and Growth," CEPR Discussion Papers 5354, C.E.P.R. Discussion Papers.
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  13. 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.
  14. Gino Gancia, 2003. "North-south trade and directed technical change," Economics Working Papers 834, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2006.
  15. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, June.
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  18. Fabrizio Zilibotti & Gino Gancia, 2009. "Technological Change and the Wealth of Nations," 2009 Meeting Papers 499, Society for Economic Dynamics.
  19. repec:oup:qjecon:v:116:y:2001:i:2:p:563-606 is not listed on IDEAS
  20. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 199-230, 04.
  21. Gino Gancia & Fabrizio Zilibotti, 2005. "Horizontal Innovation in the Theory of Growth and Development," Working Papers 200, Barcelona Graduate School of Economics.
  22. 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.
  23. Arvind Subramanian & Devesh Roy, 2001. "Who Can Explain The Mauritian Miracle: Meade, Romer, Sachs or Rodrik?," IMF Working Papers 01/116, International Monetary Fund.
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  25. Fadinger, Harald, 2008. "Productivity Differences in an Interdependent World," MPRA Paper 7603, University Library of Munich, Germany.
  26. 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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