Abstract

AVILA MONTEALEGRE, Oscar Iván. Biased Technological Change. Desarro. soc. [online]. 2014, n.73, pp.179-218. ISSN 0120-3584.  https://doi.org/10.13043/DYS.73.6.

We develop a theoretical model that replicates the empirical evidence about the effects of biased technological change on income inequality and economic growth. We also analyze the effectiveness of fiscal policy to exploit the benefits of the technological change in terms of economic growth and income inequality. The model results show that biased innovations, that favor the use of skilled workers, increase economic growth and deteriorate income distribution; in this context, an active and appropriate design of fiscal policy allows the economy to reach a steady state with higher GDP growth and lower income gap than in the initial situation.

Keywords : Biased technological change; inequality; economic growth; fiscal policy.

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