Structural Change and Economic Dynamics

Jun 4, 2019

Articles in journals

Brito, P., Gil, P., Afonso, O.

51

89-105

Europe's “2020 Strategy” has the main goal of stimulating economic growth by increasing the weight of the high-tech sector and the share of high-skilled workers. However, cross-country European data suggests the relationship between economic growth and both the technology structure and the skill structure is statistically insignificant. We investigate an analytical mechanism that connects these facts by extending a directed-technical-change growth model and taking it to the data. Under high relative barriers to entry into the high-tech sector and scale effects we replicate the empirical relationships. We derive quantitative policy implications on the effects of a reduction of barriers to entry.

O41; O31

Growth High, skilledHigh, techScale effects; Directed technical change