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The Product Cycle and Inequality

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  • Boyan Jovanovic

Abstract

This paper models the product cycle and explains how it relates to world inequality. In the model, both phenomena arise because skilled people have a comparative advantage in making high-tech products. The model can explain up to a 10:1 income differential between people and up to a 7:1 differential between countries.

Suggested Citation

  • Boyan Jovanovic, 2004. "The Product Cycle and Inequality," NBER Working Papers 10910, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10910
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    References listed on IDEAS

    as
    1. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    2. Diego Comin & Bart Hobijn, 2004. "Neoclassical Growth and the Adoption of Technologies," NBER Working Papers 10733, National Bureau of Economic Research, Inc.
    3. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    5. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
    6. Nancy L. Stokey, 1991. "The Volume and Composition of Trade Between Rich and Poor Countries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 63-80.
    7. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-570, August.
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    Cited by:

    1. Ramon Marimon & Vincenzo Quadrini, 2005. "Competition, Innovation and Growth with Limited Commitment," Working Papers 247, Barcelona School of Economics.

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    JEL classification:

    • F0 - International Economics - - General

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