Knowledge, inequality, and growth in the new economy

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Title:

Personal Author:

Nahuis, Richard

Publication Information:

Cheltenham : Edward Elgar, 2003

ISBN:

9781843763239

Subject Term:

Income distribution

Wages -- Effect of education on

Wages -- Effect of technological innovations on

Technological innovations -- Economic aspects

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Library	Item Barcode	Call Number	Material Type	Item Category 1	Status
Searching... PSZ JB	30000010070305	HC79.I5 N33 2003	Open Access Book	Book	Searching... Unknown

During the past two centuries, major technological breakthroughs such as the steam engine and electricity have acted as the catalysts for growth and have resulted in a marked increase in material well-being. The dominant technology today - information and communication technology (ICT) - does not seem to drive growth as effectively and has coincided with an apparent increase in wage inequality. This book provides explanations of these two characteristics of modern economies and analyses them from both an individual and integrated perspective.

Richard Nahuis explores and combines the seemingly separate phenomena of wage inequality between high-skilled and low-skilled workers, and the relatively low productivity growth experienced by most countries. The author provides a number of alternative theories for the increase in wage inequality as a result of new technologies, combined with an extensive review of the associated literature. He goes on to detail the technological revolution, describe why this does not necessarily result in high productivity growth and outline the best methods to measure productivity in the new economy.

This exhaustive exploration of productivity growth and wage inequality between high-skilled and low-skilled workers in the knowledge economy will be welcomed by economists and policymakers interested in the complex relationships between labour markets, innovation and technical change.

Author Notes

Richard Nahuis is at the CPB Netherlands Bureau for Economic Policy Analysis and in the Utrecht School of Economics at Utrecht University, The Netherlands.

Acknowledgements	p. xi
Part I Introduction
1. Knowledge and economic growth: General introduction and outline	p. 3
1. Introduction	p. 3
2. Spillovers and technological specificity in endogenous growth	p. 5
3. Empirical puzzles: What does the specificity perspective add?	p. 12
4. Summary and reading guide	p. 21
Notes	p. 24
2. On technology, trade and wage inequality: A survey	p. 27
1. Introduction	p. 27
2. Documenting the facts	p. 28
3. Supply, demand and institutions	p. 30
4. Trade: An evaluation on the basis of the 2 x 2 x 2 Heckscher-Ohlin model	p. 33
5. Biased technological change: An evaluation of domestic causes	p. 47
6. Amending the trade model	p. 56
7. Remaining issues	p. 67
8. General discussion and conclusion	p. 70
Notes	p. 73
Part II Theory
3. A GPT in a research and assimilation model: Exploring wage dynamics (I)	p. 81
1. Introduction	p. 81
2. General purpose technologies	p. 83
3. The model	p. 87
4. The steady state	p. 94
5. A new general purpose technology	p. 99
6. Dynamics and calibration	p. 101
7. Final remarks	p. 108
Notes	p. 108
Appendices	p. 112
A. The linearization procedure	p. 112
B. Steady-state analysis	p. 114
C. Corner solutions	p. 120
D. Dynamics of a GPT with the (3.4A) curve	p. 122
E. A destructive GPT, case (iii)	p. 123
Notes	p. 124
4. We don't see what we learn: The Solow Residual, a GPT and inequality	p. 125
1. Introduction	p. 125
2. Measurement	p. 128
3. The model	p. 130
4. A computer revolution...	p. 136
5. ... and the reason why we don't see it	p. 138
6. Conclusion	p. 144
Notes	p. 144
Appendices	p. 147
A. Solution of the model	p. 147
B. Accounting	p. 150
5. Vested interests and resistance: Adopting a General Purpose Technology	p. 157
1. Introduction	p. 157
2. Resistance to technology	p. 160
3. A simple framework	p. 165
4. The decision whether or not to adopt a newly arrived GPT	p. 168
5. The effects of competition on technology adoption	p. 173
6. Free entry and the effects of competition on resistance to change	p. 173
7. Conclusions	p. 177
Notes	p. 178
Appendices	p. 181
A. The basic model	p. 181
B. Free entry	p. 184
6. The skill premium and appropriability: Exploring wage dynamics (II)	p. 187
1. Introduction	p. 187
2. A general-equilibrium model of non-production jobs	p. 192
3. Appropriability	p. 205
4. Conclusion	p. 213
Notes	p. 214
Appendices	p. 217
A. Skilled labour in production	p. 217
B. Solution of the model in Section 3	p. 219
Notes	p. 222
7. Specific technology, variety, spillovers and welfare	p. 223
1. Introduction	p. 223
2. The model	p. 227
3. Solution of the model	p. 233
4. Optimal product variety	p. 235
5. The optimal number of permits	p. 242
6. Knowledge spillovers and welfare	p. 246
7. Conclusion	p. 254
Notes	p. 255
Appendices	p. 259
A. Solution of the model	p. 259
B. The first-best social optimum	p. 260
C. Decentralization of the first-best social optimum	p. 262
D. The blocked-entry model (N fixed)	p. 263
E. Analysis of the model with spillovers	p. 265
Notes	p. 269
Part III Empirical Applications
8. Economic development and trade in the world economy: Introducing WorldScan	p. 273
1. Introduction	p. 273
2. Factor accumulation and changing patterns of specialization	p. 275
3. Future developments: Some simulation experiments	p. 282
4. Conclusions	p. 298
Notes	p. 299
9. Openness, growth and R&D spillovers: An R&D-amended version of WorldScan	p. 301
1. Introduction	p. 301
2. The empirical model	p. 303
3. Data and estimation	p. 308
4. Worldscan: A global applied general-equilibrium model	p. 316
5. Simulation results	p. 320
6. Conclusions	p. 333
Notes	p. 335
Appendices	p. 339
A. R&D data	p. 339
B. Sensitivity analysis for the regression results	p. 342
C. Calibration	p. 345
D. Simulations without deprecation and with variation in the estimated coefficients	p. 347
Notes	p. 350
References	p. 353
Index	p. 369

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