Technology and Convergence

The empirical convergence literature envisages a world in which the presence or lack of convergence is a function of capital accumulation. This focus ignores a long tradition among economic historians and growth theorists which emphasizes technology and the potential for technology transfer. The authors suggest here that this neglect is an important oversight: simple models which incorporate technology transfer provide a richer framework for thinking about convergence. Empirically, differences in technologies across countries and sectors appear to match differences in labor productivity and to exhibit interesting changes over time. Copyright 1996 by Royal Economic Society.