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Essays on Technological Change and Economic Growth
[Thesis]. Manchester, UK: The University of Manchester; 2017.
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Abstract
This thesis places the role of technological change at the centre and provides two theoretical frameworks to explain the impact of technological change not only on wage inequalities within and across countries but also on the historical evolution in population, human capital and income per capita. Chapter 2 presents a general equilibrium model that is able to explain both domestic and international wage inequalities. The main argument is that there are broadly two types of technological change: productivity enhancing technological change and transportation cost reducing technological change. The former increases labour productivity in the country where such technological change is invented. The latter reduces transportation costs internationally, which lowers the price for imported goods thereby increasing the demand. This paper incorporates these two types of technological change into an open trade economy, where, we assume, there are two countries (i.e. home and foreign) and each country has two types of labour (i.e. skilled and unskilled). The results show that the wage inequality within one country is determined by its own combination between two types of technological change. Both skilled and unskilled international wage inequalities between two countries are determined by the combination of two technological changes in two countries. Chapter 3 considers a unified overlapping generations model to account for the dynamic evolution in technological progress, population growth, the growth in income per capita and human capital accumulation from pre-modern to modern days, by distinguishing two types of technological change: experience-based technological change and experiment-based technological change. The former is invented mainly based on past experiences gained from, for example, production or investment, which is mostly unintentional. By contrast, the latter is generated by investing both physical and human capital and is normally intentional. Our model argues that the key to explain such dynamic evolution depends on which type of technological change predominates across different periods.