Learning, experience and the dynamics of north-south Trade and technology transfer

Michael Benarroch and James Gaisford

International Economic Journal, 2002, vol. 16, issue 2, 65-83

Abstract: This paper examines the dynamics of learning and experience that underlie technology transfer using a North-South trade model with a continuum of goods. Since North is historically more experienced than South, it initially produces the most advanced goods and pays higher wages. Whenever there is a market-driven transfer of technology and production over time, there will be some wage convergence as South gradually gains experience. Nevertheless, wage inequality must persist in the steady state. Product innovation typically increases steady-state wage inequality because new goods are produced in North, and North ultimately learns than South. [F12, O19]

Date: 2002
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DOI: 10.1080/10168730200000014

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