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North-South Diffusion of a General Purpose Technology

Author

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  • Oscar Afonso
  • Alvaro Aguiar

Abstract

This paper studies the effects of the diffusion of a General Purpose Technology (GPT), that spreads first within the developed country of its origin (North), and then to a developing country (South). We use a general equilibrium model of growth, where each final good is produced by one of two available technologies. Each technology is characterized by a specific set of intermediate goods complemented by specific labor. The quality of intermediate goods is enhanced periodically by Schumpeterian R&D. When quality reaches a threshold level, a GPT arises in one of the technologies and spreads first to the other one, within the North. Then, it propagates to the South, following a similar sequence. Since diffusion is not even, neither intra nor inter-country, the GPT produces successive changes in the direction of technological knowledge and in inter and intra-country wage inequality.

Suggested Citation

  • Oscar Afonso & Alvaro Aguiar, 2005. "North-South Diffusion of a General Purpose Technology," DEGIT Conference Papers c010_024, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c010_024
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    File URL: http://degit.sam.sdu.dk/papers/degit_10/C010_024.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    North-South; General Purpose Technology; Direction of technological knowledge; Wage inequality;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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