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Technology gaps, trade and income

Sampson, Thomas (2022) Technology gaps, trade and income. American Economic Review. ISSN 0002-8282 (In Press)

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Abstract

This paper quantifies the contribution of technology gaps to international income inequality. I develop an endogenous growth model where cross-country differences in R&D efficiency and cross-industry differences in innovation and adoption opportunities together determine equilibrium technology gaps, trade patterns and income inequality. Higher R&D efficiency countries are richer and have comparative advantage in more innovation-dependent industries. I calibrate R&D efficiency by country and innovation-dependence by industry using R&D, patent and bilateral trade data. Counterfactual analysis implies technology gaps account for one-quarter to one-third of nominal wage variation within the OECD.

Item Type: Article
Additional Information: © 2022 American Economic Review.
Divisions: Economics
Date Deposited: 18 Nov 2022 16:51
Last Modified: 19 Nov 2022 00:15
URI: http://eprints.lse.ac.uk/id/eprint/117370

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