A model of technology, domestic distribution, and North-South relations

This article describes the macroeconomic model used in an ongoing study of technology policies and North-South relations. Other aspects of the study have been described elsewhere [1,2]. We examine here the rationale for the theoretical structure used in the model, the details of the equations, and a computation of solutions. To illustrate the dynamics of the model, a brief discussion is also given of the preliminary results that indicate critical relationships between domestic technology and income distributions and the North-South terms of trade. The results are based on a calibration of the model using data for Brazil and the United Kingdom.