TABLE OF CONTENTS: Introduction vii
Chapter 1: Which Tools Do We Need? 1
1.1 Production and Factor Prices 2
1.2 Factor Prices and Income Distribution 6
1.3 Factor Accumulation 11
1.4 Endogenous Technical Change 15
Chapter 2: Productivity and Wages in Neoclassical Growth Models 23
2.1 The Short Run 25
2.2 The Long Run 26
2.3 Conclusion 31
Chapter 3: Heterogeneous Labor 32
3.1 Skill-Biased Technical Progress 32
3.2 Capital-Skill Complementarity 35
3.3 Unbalanced Growth 38
3.4 Conclusion 41
Chapter 4: Competing Technologies 42
4.1 Learning the New Technology Is Costly 43
4.2 The New Technology Has Different Factor Intensities 52
4.3 Asymmetric Technical Progress 54
4.4 Conclusion 56
Chapter 5: Supply Effects 57
5.1 Supply Effects and Competing Technologies 58
5.2 Induced Bias in Innovation 72
5.3 Conclusion 84
Chapter 6: Labor as a Quality Input: Skill Aggregation and Sectoral Segregation 85
6.1 Bundling and Pricing of Labor Market Characteristics 86
6.2 Conclusion 98
Chapter 7: The Economics of Superstars 99
7.1 A Simple Model 100
7.2 Occupational Choice and Displacement 103
7.3 Growth and the Allocation of Talent 108
7.4 Hierarchy and Span of Control 109
7.5 Conclusion 116
Chapter 8: Complementarities and Segregation by Skills 117
8.1 A Simple Model 117
8.2 Application: Household Income Inequality and Assortative Mating 125
8.3 Extension: Increasing Firm Size and the Number of Worker Types in Segregated Equilibria 127
8.4 Aggregating Individual Interactions 131
8.5 Conclusion 148
8.6 Appendix 148
Chapter 9: Demand Effects 152
9.1 The Isoelastic Benchmark 153
9.2 Nonhomothetic Utility 154
9.3 The Limited Needs Property 155
9.4 Dynamics: Growth and the Introduction of New Varieties 158
9.5 An Application to Globalization 163
9.6 Asymmetries between Goods 165
9.7 Conclusion 171
9.8 Appendix 172
Chapter 10: Nonhomothetic Preferences and the Distributive Effects of Innovation and Intellectual Property 174
10.1 The Social Welfare Problem 175
10.2 Second-Best Analysis: The Role of Intellectual Property 179
10.3 Conclusion 182
10.4 Appendix: Derivation of (10.11) 183
Epilogue 184
References 187
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