TEL> Vol.2 No.2, May 2012

Technology Intensity and the World Distribution of Income

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ABSTRACT

This paper presents a simple model of monopolistic competition in a North-South world. The North introduces new goods that the South takes over when the goods become old. The new goods are more technology-intensive than the old goods because innovation requires more efforts than imitation. In the literature, the world distribution of income favors the country that produces a greater range of variety. However, in this model, the South’s catching up in terms of the range of variety is not a threat to the North’s status quo. It is the difference in technology intensity that determines their relative wage.

Cite this paper

C. Lo and G. Fann, "Technology Intensity and the World Distribution of Income," Theoretical Economics Letters, Vol. 2 No. 2, 2012, pp. 200-202. doi: 10.4236/tel.2012.22035.

References

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