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...

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...

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...

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...

In recent months, the euro area has been under fire from the financial markets, speculators being blamed for the mounting of a kind of conspiracy whose ultimate goal would be the disintegration of the project's Economic and Monetary Union (EMU). In this paper, we discuss the true reasons of this...