| Abstract: |
This paper develops a general equilibrium endogenous growth model that
emphasizes the mechanisms, other than market size, through which trade-induced
North-South technological knowledge diffusion influences the direction of
technological progress and, thus, the path of intra and inter-country wage
inequality. In contrast with the market-size effect, more common in previous
literature on skill-biased technological change, the operation of the price
channel, central to this paper, predicts an increasing high-skilled
technological bias following openness, which is more in line with the recent
trends observed in developed and developing countries. |