Working Paper: NBER ID: w10910
Authors: Boyan Jovanovic
Abstract: This paper models the product cycle and explains how it relates to world inequality. In the model, both phenomena arise because skilled people have a comparative advantage in making high-tech products. The model can explain up to a 10:1 income differential between people and up to a 7:1 differential between countries.
Keywords: Product Cycle; Inequality; Technology; Intellectual Property; Economic Growth
JEL Codes: F0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Comparative advantage of skilled individuals in high-tech production (J24) | Income differentials (D31) |
| Technological advancement (O00) | Income inequality (D31) |
| Efficiency gap between technologies (O33) | Economic disparities (F63) |
| Reduction of patent protection (O34) | Economic outputs (E23) |