Welcome / Research output / Articles / Articles published in selected journals (indexed in CEFAGE ranking) / How powerful are network effects? A skill-biased technological approach

How powerful are network effects? A skill-biased technological approach

Afonso, O., M. Magalh„es (2020), "How powerful are network effects? A skill-biased technological approach", Macroeconomic Dynamics.
Abstract:

Even for the standard skill-biased technological change (SBTC) literature, the generic rise in the skill premium in the face of the relative increase in skilled workers since the 1980s seems a little puzzling. We develop a general equilibrium SBTC growth model that allows the dominance of either the price channel or the market-size channel mechanism through which network spillovers affect the technological-knowledge bias and, thus, the paths of intra-country wage inequality. The proposed mechanisms can accommodate facts not explained by the earlier literature.