The Product Cycle and Inequality
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NBER Working Paper No. 10910
Issued in November 2004
NBER Program(s): EFG PR
This paper models the product cycle and explains how it relates to world inequality. In the model, both phenomena arise because skilled people have a comparative advantage in making high-tech products. The model can explain up to a 10:1 income differential between people and up to a 7:1 differential between countries.
This paper is available as PDF (501 K) or via email.
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