Template-Type: ReDIF-Paper 1.0
Author-Name: Lucrezia Fanti
Author-X-Name-First: Lucrezia
Author-X-Name-Last: Fanti
Author-Email: lucrezia.fanti@unicatt.it
Author-Workplace-Name: Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italia
Author-Name: Marcelo C. Pereira
Author-X-Name-First: Marcelo C.
Author-X-Name-Last: Pereira
Author-Email: mcper@unicamp.br
Author-Workplace-Name: Institute of Economics, University of Campinas, Campinas, Brazil
Author-Name: Maria Enrica Virgillito
Author-X-Name-First: Maria Enrica
Author-X-Name-Last: Virgillito
Author-Email: mariaenrica.virgillito@santannapisa.it
Author-Workplace-Name: Institute of Economics, Scuola Superiore Sant’Anna, Pisa, Italia – Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italia
Title: The North-South divide: sources of divergence, policies for convergence
Abstract: Building on the labour-augmented K+S framework (Dosi et al., 2010, 2017, 2020), we address the analysis of North-South divide by means of an agent-based model (ABM) endogenously reproducing the divergence between two artificial macro-regions. The latter are characterized by identical initial conditions in terms of productive and innovation structures, but different labour market organizations. We identify the role played by different labour markets functioning on the possible divergence across the two regions, by finding that divergences in labour market reverberate into asymmetric productive performance due to negative reinforcing feedback loop dynamics. We then compare alternative policies by showing that investment schemes aimed at increasing machine renewal and higher substitutionary investment are the most effective in fostering the convergence.
Length: 40
Creation-Date: 2022-05
File-URL: http://dipartimenti.unicatt.it/politica-economica-DIPE0027.pdf
File-Format: Application/pdf
File-Function: First version, 2022
Number: dipe0027
Classification-JEL: C63, J3 , E24, O1 
Keywords: Agent-Based Models; Technology Gap; Labour Market
Handle: RePEc:ctc:serie5:dipe0027