A NOTE ON SKILL-STRUCTURE SHOCKS, THE SHARE OF THE HIGH-TECH SECTOR, AND ECONOMIC GROWTH DYNAMICS. (13th April 2016)

• Record Type: Journal Article
• Authors: Gil, Pedro Mazeda; Afonso, Oscar; Vasconcelos, Paulo B.
• Is Part Of: Macroeconomic dynamics. Volume 20:Number 7(2016:Oct.)
• Page Start: 1906
• Page End: 1923
• Publication Date: 2016-04-13
• Subjects: Industry Dynamics, -- High Tech, -- Low Tech, -- Directed Technical Change, -- Economic Growth; Macroeconomics -- Periodicals; 339.05
• DOI: 10.1017/S1365100515000152
• Languages: English
• ISSNs: 1365-1005

Abstract

Abstract : By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the shares of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a positive shock in the proportion of high-skilled labor, the technological-knowledge bias channel leads to unbalanced sectoral growth with a noticeable shift of resources across sectors. A calibration exercise suggests that the model is able to account for up to from 50 to about 100 percent of the increase in the share of the high-tech sector observed in the data from 1995 to 2007. However, the model predicts that the dynamics of the share of the high-tech sector has no significant impact on the dynamics of the economic growth rate.