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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.

KEYWORDS

Innovation; Technology Transfer; Technology Intensity; 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.





Author: Chu-Ping Lo, Guang-Jong Fann

Source: http://www.scirp.org/



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