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GROWTH AND WAGE INEQUALITY IN A SCALE‐INDEPENDENT MODEL WITH R&D AND HUMAN‐CAPITAL ACCUMULATION
Author(s) -
AFONSO OSCAR
Publication year - 2010
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2009.02135.x
Subject(s) - economics , human capital , complementarity (molecular biology) , wage inequality , inequality , technological change , labour economics , capital deepening , wage , returns to scale , technical change , general equilibrium theory , capital (architecture) , physical capital , microeconomics , production (economics) , financial capital , macroeconomics , capital formation , market economy , productivity , history , mathematical analysis , archaeology , biology , genetics , mathematics
We present a dynamic, non‐scale general equilibrium model with two human‐capital types where Schumpeterian R&D and human‐capital accumulation are the engines of growth and wage inequality. In particular, wage inequality is encouraged by relative changes in supply and demand of both human‐capital types. Relative supply restricts employed human‐capital levels. Relative demand is instantly affected by a new general‐purpose technology and, as in the skill‐biased technological change literature, by technological‐knowledge bias. By considering substitutability between technologies and complementarity between inputs, the bias is driven by the price channel (not by the market‐size channel) and is affected by human‐capital accumulation.
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