Break Income Elasticities_Final Version.pdf (717.02 kB)
Technological progress, non-price factors competitiveness, and changes in trade income elasticities: empirical evidence from South Korea and Hong Kong
journal contributionposted on 2020-08-13, 15:00 authored by Marco Flávio Cunha Resende, Vitor Leone, Daniela Almeida Raposo Torres, Simeon ColemanSimeon Coleman
In the Balance of Payments Constrained Growth model literature, income elasticities (IE) are considered as the crucial element determining a country’s long run growth rate. Although the extant literature accepts that technology matters for the IE magnitude, explanations linking technology and the IE magnitude are limited. In this paper, we make use of the National Innovation System (NIS) concept from the Evolutionary School to explain the channels through which the size of a country’s IE is influenced by the level of development of its NIS, which in turn, is a channel through which the non-price competitiveness factors work. Additionally, we empirically test the hypothesis that the catch-up allowed by NIS developments achieved in South Korea and Hong Kong improved their IE over the 1980-95 period. Our empirical results suggest a link between the level of NIS development and the size of the IE.
CNPq (The Brazilian federal research funding agency)
- Business and Economics
Published inEuropean Journal of Economics and Economic Policies: Intervention
- AM (Accepted Manuscript)
Rights holder© The Authors
Publisher statementThe definitive, peer reviewed and edited version of this article is published in European Journal of Economics and Economic Policies: Intervention 18, 1, 29-54, 2021. The definitive published version is available at https://doi.org/10.4337/ejeep.2020.0071.