Author(s)

Chu-Ping Lo, Guang-Jong Fann

Department of Agricultural Economics, National Taiwan University, Taipei, Chinese Taipei.
Department of Economics, National Cheng Kung University, Tainan, Chinese Taipei.

This paper presents a simple model of monopolistic competition in a North-South world. The North introduces new goods that the South takes over when the goods become old. The new goods are more technology-intensive than the old goods because innovation requires more efforts than imitation. In the literature, the world distribution of income favors the country that produces a greater range of variety. However, in this model, the South’s catching up in terms of the range of variety is not a threat to the North’s status quo. It is the difference in technology intensity that determines their relative wage.

Innovation; Technology Transfer; Technology Intensity; Relative Wage

C. Lo and G. Fann, "Technology Intensity and the World Distribution of Income," Theoretical Economics Letters, Vol. 2 No. 2, 2012, pp. 200-202. doi: 10.4236/tel.2012.22035.