Showing papers by "Óscar Afonso published in 2014"
TL;DR: In this article, the authors analyze the institutional literature aiming to explain why this perspective obtains better results than others in development economics, and stress the relevance of New Institutional Economics as an adequate framework for a broad understanding of development issues.
Abstract: Institutions crucial for the analysis of how agents deal with uncertainty have been gaining increasing relevance on the economic research agenda. In this paper, we analyze the institutional literature aiming to explain why this perspective obtains better results than others in development economics. In particular, we stress the relevance of New Institutional Economics as an adequate framework for a broad understanding of development issues.
31 citations
TL;DR: In this article, the authors developed a general equilibrium endogenous growth model that emphasizes the IPR enforcement effects on growth, in a scenario of north-south technological knowledge diffusion, where the economy consists of three sectors, and firms are engaged in step-by-step innovation.
22 citations
TL;DR: In this article, a trade network is proposed and a set of variables that represent the participation of countries in autocatalytic trade cycles is constructed, and a clear relationship between these variables and economic growth is found since more innovation is produced in countries that are part of trade cycles.
Abstract: This paper shows that autocatalytic trade cycles can be a positive feedback system for innovation and thus for economic growth. Using United Nations data, a trade network is proposed and a set of variables that represent the participation of countries in autocatalytic trade cycles is constructed. A clear relationship between these variables and economic growth is found since more innovation is produced in countries that are part of trade cycles. However, the relationship changes with autocatalytic trade cycle sizes, categories of goods and time scales. Moreover, autocatalytic trade cycles also have a positive effect for the trade flows involved, although this effect differs significantly depending on the size of the cycles. This new approach based on autocatalytic trade cycles emphasizes the benefits that countries can extract from trade cycles and points out the need of policies that foster these benefits. These conclusions strengthen existing literature, and also add new insights to innovation p...
12 citations
TL;DR: In this article, the authors identify and quantify the long-run link between the technology structure and the skill structure by considering an explicit role for the (potential) complementarity between technological goods; the Tobin-q and the technology characteristics of the firms through their impact on economic growth.
11 citations
TL;DR: In this article, the authors used a growth model with a public health infrastructure to analyze, in detail, its local dynamics, revealing that some candidates for equilibria turn out to be non-relevant and are therefore ruled out.
11 citations
TL;DR: In this paper, the authors developed a non-scale, idea-based, one-sector growth model with complementarities and productive public expenditure, and analyzed theoretically the growth effects of an increase in productive public expenditures, which they found positive in the short, medium and long run.
Abstract: Multidisciplinary innovation is the main engine of growth for an increasing number of economies. Innovation requires the participation of and interaction between all economic agents. It also requires public spending on education, research and infrastructures. Our main goal is to emphasize the government's role in a growing innovation economy. Developing a non-scale, idea-based, one-sector growth model with complementarities and productive public expenditure, we analyse theoretically the growth effects of an increase in productive public expenditure, which we find positive in the short, medium and long run.
10 citations
TL;DR: In this paper, the authors analyse the skill premium and the growth rate in an innovator-imitator general equilibrium growth model assuming (i) internal costly investment in both physical capital and R&D, (ii) complementarities between intermediate goods in production and (iii) technological-knowledge diffusion.
Abstract: We analyse the skill premium and the growth rate in an innovator-imitator general equilibrium growth model assuming (i) internal costly investment in both physical capital and R&D, (ii) complementarities between intermediate goods in production and (iii) technological-knowledge diffusion. We find that in the imitator country these three elements influence the economic growth rate and the skill premium. In the innovator country, while the growth rate is affected by costly investment and complementarities, the skill premium is not affected by any of our assumptions. It depends solely on the productive advantage of high-skilled over low-skilled labour, which suggests that the sustained increase in the skill premium observed in several developed countries over the last three decades may have been due to increases in such productive advantage.
2 citations
Posted Content•
TL;DR: In this article, the authors proposed a North-South model that encompasses these empirical facts and proposes explanatory mechanisms to show how the technological-knowledge gap is hard to reverse, namely when, due to higher returns, the majority of scientists are concentrated in the North.
Abstract: It is widely recognized that scientific research has a dramatic impact on economies since it is crucial to foster technological knowledge. Today’s migratory movements and concentration of highly educated population and population with high scientific potential in developed countries play an essential role in enhancing research and boosting economic growth. We propose a North-South model that encompasses these empirical facts and proposes explanatory mechanisms. We show how the technological-knowledge gap is hard to reverse, namely when, due to higher returns, the majority of scientists are concentrated in the North. The implications of having either perfect- or no-labour mobility between countries are studied. In addition, it is showed the effect of complementarity or substitutability of goods on scientists’ incentives may allow countries to avoid a poverty trap. The calibrated model provides consistent dynamics with actual data. Scientists’ incentives are highlighted as the main source of divergence or convergence between countries.
1 citations
Posted Content•
TL;DR: In this article, the authors show that there is no inconsistency between the two facts, if we consider a further dynamic eect associated to directed technical change: the existence of dierential barriers to entry in high-tech and low-tech sectors.
Abstract: Empirical evidence on the relationship between economic growth, the technology structure and the skill structure seems to be inconsistent: the weak relationship between economic growth and the skill structure is conventionally interpreted as pointing to the non-existence of scale eects, while the technology structure-skill structure relationship indicates that there are. We show that there is no inconsistency between the two facts, if we consider a further dynamic eect associated to directed technical change: the existence of dierential barriers to entry in high-tech and low-tech sectors. To prove this, we extend a benchmark directed technical change model by incorporating both horizontal and vertical R&D and estimate and calibrate it with cross-country European data. This framework allows us to derive interesting policy implications, namely that the eects of education policy on economic growth may be eectively leveraged by industrial policy aiming to reduce barriers to entry into the high-tech sectors.