Increasing returns and the international distribution of income

Alexandre De Zagottis ()

Brazilian Journal of Political Economy, 2008, vol. 28, issue 3, 454-470

Abstract: The existence of increasing returns in high technology industries assigns a path dependent character to the international division of labor. Rich countries, first entrants in these industries, enjoy permanent advantages that prevent, in a free market environment, the development of such industries in middle-income countries. This dynamics allows the former group of countries to experience a higher growth rate of labor productivity than the latter, and, as a result, increases the gap between the workers’ standard of living in these countries. It is up to the States of middle-income countries the task of devising development strategies capable of breaking such pattern and improving the international distribution of income. JEL Classification: D62; F15; F43; O25; O38; O47.

Keywords: increasing returns; externalities; international division of labor; national strategy (search for similar items in EconPapers)
Date: 2008
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