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Faculty of Economics

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Impullitti, G.

Global innovation races, offshoring and wage inequality

Review of Internationall Economics

Abstract: In the 1970s and 1980s the US position as the global technological leader was increasingly challenged by Japan and Europe. In those years the US skill premium and residual wage inequality increased substantially. This paper presents a two-region, quality-ladder growth model where the lagging economy progressively catches up with the leader. As the innovation gap closes, the advanced country experiences fiercer foreign technological competition that forces its firms to innovate more. Faster technical change increases the skill premium and residual inequality. Offshoring production and innovation plays a key role in shaping the link between international competition and inequality.

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Publisher's Link: http://onlinelibrary.wiley.com/enhanced/doi/10.1111/roie.12202/



Papers and Publications



Recent Publications


Faraglia, E., Marcet, A., Oikonomou, R. and Scott, A. Government Debt management: the Short and the Long of it Review of Economic Studies, accepted [2018]

Carvalho, V. M. and Grassi, B. Large Firm Dynamics and the Business Cycle American Economic Review [2019]

Onatski, A. and Wang, C. Alternative Asymptotics for Cointegration Tests in Large VARs Econometrica [2018]