The model formalizes a topic that the economic literature addresses with increasing frequency, namely that workers who have no access to adequate levels of education, health and motivation tend to learn more slowly and this in turn reduces the rate of innovation in products and processes in the firm. To the extent that international competitiveness increasingly relies on innovation and imitation of technology, a low level of human development will render lost opportunities for growth. Thus, the model assumes that - up to a certain critical level of the real wage - increases in real wages lead to a higher rate of growth consistent with balance-of-payments equilibrium, which makes compatible growth and income distribution even in contexts of external openness and intense international competition.
economic growth; international competitiveness; technology and international trade
