Endogenous Technological Capability,Trade Policy and Coordination Failure: A Reconsideration of Economic Take-Off(s)

Leo Yanes

No 1306, MRG Discussion Paper Series from School of Economics, University of Queensland, Australia

Abstract: Economic development may feature entry into high-tech industries ('high-tech industrialization'), or expansion along low-tech trajectories ('low-tech industrialization'). By endogenizing technological capability within a coordination failure framework, we uncover mechanisms that help explain the differences between these types of industrialization. The process of development is characterized through a sequence of take-offs. In the first instance, an �industrial take-off� triggers industrialization. Subsequently, a �technological take-off� activates investment in technological capability. If wages rise too rapidly after crossing the industrial take-off, the economy misses a window of opportunity, and the technological take-off is bypassed. In this case, industrialization proceeds without entry into high-tech industries, and the economy ends up with lower income than otherwise. Trade policy is an effective instrument to trigger industrialization.

References: Add references at CitEc
Citations:

Downloads: (external link)
https://economics.uq.edu.au/files/46966/1306.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qld:uqmrg6:13

Access Statistics for this paper

More papers in MRG Discussion Paper Series from School of Economics, University of Queensland, Australia Contact information at EDIRC.
Bibliographic data for series maintained by SOE IT ().