| Table of Contents | 11 |
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| A. Globalization, Specialization and Innovation Dynamics | 17 |
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| A.1 Introduction | 17 |
| A.2 Approaches in Modern Macroeconomics | 19 |
| A.3 Human Capital, Physical Capital and Innovations in Open Economies | 23 |
| A.4 A Critique of the Heckscher-Ohlin-Samuelson Approach | 27 |
| A.5 Solving the Leontief Paradox? | 30 |
| A.6 Variations on the Solow Model: Some New Insights for a Monetary Economy | 36 |
| A.7 Technological Progress and the Long Run Price Level | 50 |
| A.8 Foreign Direct Investment and Innovation | 82 |
| A.9 Output Dynamics: Interaction of the Demand Side and the Supply Side | 97 |
| A.10 Growth Accounting Under Unemployment and Okun’s Law | 99 |
| A.11 Innovation, Trade and Foreign Investment | 102 |
| A.12 Conclusions | 108 |
| Appendix A.1: Aggregation in a Two-Sector Growth Model: A Modified Solow Approach with Cobb- Douglas Production Functions | 110 |
| Appendix A.2: Two Sector Model (KHAN/BILGINSOY, 1994) | 114 |
| Appendix A.3: Labor Markets with Tradables and Nontradables | 115 |
| Appendix A.4: Product Innovations with Schumpeterian Intermediate Products: A Simple Formula | 118 |
| Appendix A.5: Medium-term Output and Wage Policies in an Open Economy | 119 |
| B. Savings, Investment and Growth: New Approaches for Macroeconomic Modelling | 124 |
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| B.1 Introduction | 124 |
| B.2 A Medium-term Keynes-Solow Model | 126 |
| B.3 Conclusions and Possible Extensions | 140 |
| C. Economic Integration, Technological Progress and Growth | 143 |
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| C.1 Rich Countries vs. Poor Countries and Economic Integration | 143 |
| C.2 Set-up of the Model | 146 |
| C.3 Asymmetric Foreign Direct Investme
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