Gabriel Porcile
Growth, Wage Bragaining and Technological Policy in BOP-Constrained Multigoods Growth Model

Abstract: The paper develops the Ricardian multigoods model in several directions with a view to studying the relationship between the technology gap, the pattern of specialization and the institutional framework structuring technological learning and wage bargaining. The international economy is formed by two countries, North and South, being the North the technological leader. The evolution of the North-South technology gap depends on the initial level of the gap (representing the potential for imitation in the South) and the degree of diversification of the economic structure of the South (that gives rise to technological externalities). The National System of Innovation defines the extent with which technological opportunities related to the gap and to the productive structure are effectively seized upon in the South. In turn, the parameters affecting the South-North relative wage respond to the bargaining power of labor unions. The interaction between the technology gap and relative real wages endogenously defines the number and technological intensity of the goods produced in the North vis-à-vis those produced in the South, i.e. the pattern of specialization. The latter is related to the relative rate of economic growth through the Balance-of-Payments constraint. Finally, exercises of comparative dynamics are produced with a view to analyzing how growth and distribution respond to policy changes affecting the National System of Innovation and the conditions of wage bargaining.

JEL: 041 and 043.
Keywords: growth and international specialization; wage bargaining, technological change.



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