Three essays on technological progress and international trade
Doctor of Philosophy
The thesis is divided into three essays. In the first essay, a two-by-two model is formulated in which changes in price are caused by technological progress that takes place in one sector. It is found that the factor used intensively in the sector where technology advances will be better off in terms of both goods if the proportionate decrease in the price of that good is less than the proportionate increase in productivity; the other factor, although it suffers from the change in factor intensity, may still be better off due to the improvement in productivity. The second essay deals with technology that is accessible to every one in the economy. Since technology is a public good, it pays to devote more resources in the creation of new technology if the population size is larger; productivity increases as the investments for new technology increase. The optimal level of population is reached when the positive effect of increased productivity is balanced by the negative effect of the increased labor size. The third essay discusses two topics: first, the optimal level of technology acquisition; second, the international indebtedness. Productivity will increase because of the acquired technology; however, the secondary burden of the royalty payments will turn the terms of trade against the adopting country. The optimal level of technology acquisition is then reached when the gains from the acquired technology are balanced by the losses from the worsening terms of trade. In the second part of the third essay, the advanced country temporarily falls behind in the creation of technology but expects to regain the leading margin in productivity. Both countries can be better off if the advanced country now borrows from the backward country and pays the loan back with interest when the leading margin in technology of the advanced country is reestablished in the future.
Economics, Commerce-Business; Economics