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Optimal technology and development

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  • Moscoso Boedo, Hernan J.

Abstract

Skill intensive technologies seem to be adopted more often by rich countries rather than poor ones. Related to that observation, the ratio of wages of skilled to unskilled workers - the skill premium - shows two important features over time and across countries. In the US the skill premium decreased during the first half of the 20th century and increased after 1950, evolving in a U shaped pattern. On the other hand, the same measure across countries around 1990 is hump shaped when countries are ordered by GDP per worker. By modeling the decisions for factor accumulation and technology adoption, this paper gives a systematic explanation as to why we see ever more skill intensive technologies being adopted both over time in the US and across countries. The model developed here endogenously generates predictions for the skill premium that are consistent with both US and international observations under the same set of parameter values.

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  • Moscoso Boedo, Hernan J., 2010. "Optimal technology and development," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 617-634, June.
    • Handle: RePEc:eee:jmacro:v:32:y:2010:i:2:p:617-634
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    Cited by:

    1. Neyapti, Bilin, 2013. "Modeling institutional evolution," Economic Systems, Elsevier, vol. 37(1), pages 1-16.
    2. Hernan J. Moscoso Boedo, 2006. "Former Communist Countries and their transition to Capitalism," Virginia Economics Online Papers 372, University of Virginia, Department of Economics.
    3. repec:grz:wpsses:2017-02 is not listed on IDEAS
    4. Moscoso Boedo, Hernan, 2018. "Aggregate implications of the tax reform of 2017: Can taxes guide technology?," Economics Letters, Elsevier, vol. 173(C), pages 6-9.

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    More about this item

    Keywords

    Skill premium Endogenous skill-biased technical change;

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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