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A Macroeconometric Model for the Analysis of the Impact of Technological Change and Trade on Employment

Tancioni, M   Simonetti, R

Journal of Interdisciplinary Economics   13 (1-3) 185-221

January 2002

This article, which is a key part of the policy analysis carried out in the Eu funded AITEG project, studies the impact of changes in technology and globalisation on the whole economy by looking explicitly at the indirect effect (i.e, beyond industries) of new technology in the economy through the analysis of compensation mechanisms. The paper introduces the theoretical foundations and the structure of a macroeconometric model for the analysis of compensation mechanisms that influence the overall impact of the introduction of new technology on employment.

After a brief explanation of the main relationships between technological change and employment, the general structure of the model is outlined. The formal model illustrates a possible way of approaching, from a macroeconomic perspective, the analysis of the complex relationships between technological change, trade, growth and employment dynamics. The aim of the analysis is to highlight the relevance of some aspects that in the past have only received minor treatment in mainstream contributions to the issue. In particular, the strong dependence of the results on distribution and demand is recognized. The model proposed is the extended version of a macroeconomic model previously presented by Vivarelli in 1995. The modifications introduced in the original model have both theoretical and technical relevance. Some results from an application to Italy and the United Kingdom follow a brief discussion of the techniques adopted for the econometric estimation.