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Lecturas de Economía

Print version ISSN 0120-2596

Abstract

ORTIZ, Carlos Humberto  and  CASTRO, Javier Andrés. Technological Integration and Income Gaps. Lect. Econ. [online]. 2008, n.68, pp.217-247. ISSN 0120-2596.

Leontief (1963) claimed that underdeveloped countries are poor because they are by far less economically diversified. This paper shows that a general equilibrium model with a stable input-output structure and a productivity externality due to input diversification may be consistent with Leontief's hypothesis. An open economy version of the model yields the possibility of breaking the factor price equalization theorem so that developed economies enjoy higher capital remuneration and higher income level. Some empirical evidence on the relationship between technological integration and real income is provided.

Keywords : input-output; technological integration; income gaps; asymmetric technological structures; factor price equalization.

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