Citation

Discussion Paper Details

Please find the details for DP2584 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The World Technology Frontier

Author(s): Francesco Caselli and Wilbur John Coleman II

Publication Date: October 2000

Keyword(s): Appropriate Technology and Cross-Country Income Differences

Programme Area(s): International Macroeconomics

Abstract: We define a country's technology as a triple of efficiencies: one for unskilled labour, one for skilled labour, and one for capital. We find a negative cross-country correlation between the efficiency of unskilled labour and the efficiencies of skilled labour and capital. We interpret this finding as evidence of the existence of a World Technology Frontier. On this frontier, increases in the efficiency of unskilled labour are obtained at the cost of declines in the efficiency of skilled labour and capital. We estimate a model in which firms in each country optimally choose from a menu of technologies, i.e. they choose their technology subject to a Technology Frontier. The optimal choice of technology depends on the country's endowment of skilled and unskilled labour, so that the model is one of appropriate technology. The estimation allows for country-specific technology frontiers, due to barriers to technology adoption. We find that poor countries tend disproportionately to be inside the World Technology Frontier.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2584

Bibliographic Reference

Caselli, F and Coleman II, W. 2000. 'The World Technology Frontier'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2584