The literature identifies North-South disparities in Total Factor Productivity (TFP), which, in turn, justify the bulk of international income differences. By building a dynamic, general equilibrium model of North-South technological-knowledge diffusion with scale-invariant growth, we extend the...

We develop a general equilibrium endogenous growth model of a monetary union between two countries that differ in economic dimension and level of development. By solving transitional dynamics towards the steady state, we examine the impact of fiscal shocks that may lead to excessive deficits....

In the standard models of North-South technological-knowledge diffusion, the larger the initial technological-knowledge gap between countries, the greater the Southern catching up. However, this result does not adjust well to Southern reality as a whole. The purpose of this paper is to...

In the skill-biased technological change literature, the technological-knowledge bias, which drives wage inequality, is determined by the market-size channel. Motivated by the literature on scale effects since Jones (1995a, b), the standard R&D technology is modified so that wage inequality...

Institutions crucial for the analysis of how agents deal with uncertainty have been gaining increasing relevance on the economic research agenda. In this paper, we analyze the institutional literature aiming to explain why this perspective obtains better results than others in development...

By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the share of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a...

This paper develops an endogenous directed technical change model that is consistent with the data on the distribution of firms and production across high- and low-tech sectors, and its relationship to economic growth, in a number of developed countries. We argue that scale effects at the...

We analyse the skill premium and the growth rate in an innovator-imitator general equilibrium growth model assuming (i) internal costly investment in both physical capital and R&D, (ii) complementarities between intermediate goods in production and (iii) technological-knowledge diffusion. We...

Based on an extended model of endogenous directed technical change and on cross-country data, we identify and quantify the long-run link between: (i) the technology structure (high- vs. low-tech sectors) and the skill structure (high- vs. low-skilled workers), by considering an explicit role for...