Product Cycles and Domestic Wage Inequality in Innovating Countries

Alison Butler

Canadian Journal of Economics, 1997, vol. 30, issue 4, 1007-26

Abstract: High-technology industries comprise a significant and increasing share of manufactured output in industrialized countries. Increasing international competition in high-technology industries raises an important question: what is the effect of innovation in one country on the standard of living in another? Through the introduction of two types of workers, the effects of innovation and technology transfer on relative prices, wages, and income between workers both within and across innovating countries that transfer technology also can be examined. The results show that a change in the determinants of innovation and technology transfer in one country redistributes income in both countries.

Date: 1997
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