In our simulations, the steady state was saddle point stable and the Blanchard-Kahn conditions for
the determinacy of the equilibrium were satisfied.
References
[1] Acemoglu D. (2002a). “Technical Change, Inequality and the Labor Market”, Journal of Eco-
nomic Literature, XL, pp. 7-72.
[2] Acemoglu D. (2002b). “Directed Technical Change”, Review of Economic Studies.
[3] Acemoglu, D. (2003). “Patterns of Skill Premia”, Review of Economic Studies, volume 70, pp.
199-230.
[4] Aghion P., and P. Howitt (1992). “A Model of Growth through Creative Destruction”, Econo-
metrica 60(2): 323-351.
[5] Aghion, P., P. Howitt, and G. Violante. (2002). “General Purpose Technology and Wage Inequal-
ity,” Journal of Economic Growth, vol. 7(4), December 2002, 315-345.
[6] Aghion, P., and P. Howitt, (2006), “Appropriate Growth Policy: A Unifying Framework”, Journal
of the European Economic Association, 4, p. 269-314.
[7] Aghion, P., and P. Howitt, (2005) “Growth with Quality-Improving Innovations: An Integrated
Framework”, Handbook of Economic Growth, Volume 1A, Aghion P. and S.N. Durlauf (Eds.),
Amsterdam, North-Holland, 2005, 67-110
[8] Autor, D., and L. Katz, (1999) “Changes in the Wage Structure and Earnings Inequality”, Hand-
book of Labor Economics, Vol 3A, Amsterdam, North Holland.
[9] Berman, E., J. Bound, and Z. Griliches, (1994). “Changes in the Demand for Skilled Labor within
U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufactures,” Quarterly
Journal of Economics, Vol. 106, No. 2, pp. 367-397.
[10] Card, D., and J. Di Nardo, (2002) “Skill-Biased Technological Change and Rising Wage Inequality:
Some Problems and Puzzles”, Journal of Labor Economics, Vol. 20, No. 4 (Oct., 2002), pp. 733-
783
[11] Caselli, F. (1999). “Technological Revolutions,” American Economic Review, 89, 1, 78-102.
[12] Cozzi, G. (2007), "Self-fulfilling prophecies in the quality ladders economy", Journal of Develop-
ment Economics, vol. 84(1), pp. 445-464.
[13] Cozzi, G. (2008), "Can social norms affect the international allocation of innovation?", Working
Papers 2008_2, Department of Economics, University of Glasgow.
[14] Cozzi, G, and G. Impullitti, (2008). “Fiscal policy, Heterogeneous Industries, and Long-run
Growth,” mimeo.
25