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Structural development accounting

  • Gino Gancia
  • Andreas Müller
  • Fabrizio Zilibotti

We construct and estimate a unifi ed 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 fi t 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 amplifi es 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 - University of Zurich in its series ECON - Working Papers with number 010.

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Date of creation: Mar 2011
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Handle: RePEc:zur:econwp:010
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  8. Caselli, Francesco & Coleman II, Wilbur John, 2000. "The World Technology Frontier," CEPR Discussion Papers 2584, C.E.P.R. Discussion Papers.
  9. 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.
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  17. Diego Comin & Bart Hobiijn, 2006. "An Exploration of Technology Diffusion," NBER Working Papers 12314, National Bureau of Economic Research, Inc.
  18. Zilibotti, Fabrizio & Aghion, Philippe & Acemoglu, Daron, 2006. "Distance to Frontier, Selection, and Economic Growth," Scholarly Articles 4554122, Harvard University Department of Economics.
  19. 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.
  20. 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.
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