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If Technology Has Arrived Everywhere, Why Has Income Diverged?

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  • Comin, Diego
  • Mestieri, Martí

Abstract

We study the lags with which new technologies are adopted across countries, and their long-run penetration rates once they are adopted. Using data from the last two centuries, we document two new facts: there has been convergence in adoption lags between rich and poor countries, while there has been divergence in penetration rates. Using a model of adoption and growth, we show that these changes in the pattern of technology diffusion account for 80% of the Great Income Divergence between rich and poor countries since 1820.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9466.

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Date of creation: May 2013
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Handle: RePEc:cpr:ceprdp:9466

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Keywords: great divergence; technology diffusion; transitional dynamics;

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References

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  1. Robert E. Lucas, 2000. "Some Macroeconomics for the 21st Century," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 159-168, Winter.
  2. Robert J. Barro & Xavier Sala-i-Martin, 1995. "Technological diffusion, convergence and growth," Economics Working Papers 116, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-83, April.
  4. Diego Comin & Bart Hobijn & Emilie Rovito, 2008. "A new approach to measuring technology with an application to the shape of the diffusion curves," The Journal of Technology Transfer, Springer, vol. 33(2), pages 187-207, April.
  5. Diego Comin & Bart Hobijn, 2003. "Cross-country technology adoption: making the theories face the facts," Staff Reports 169, Federal Reserve Bank of New York.
  6. Oded_Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," Working Papers 2006-01, Brown University, Department of Economics.
  7. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  8. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
  9. Gary D. Hansen & Edward C. Prescott, 1998. "Malthus to Solow," NBER Working Papers 6858, National Bureau of Economic Research, Inc.
  10. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2012. "Trade, Technology and the Great Divergence," Departmental Working Papers 35, United States Naval Academy Department of Economics.
  11. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
  12. Diego A. Comin & Martí Mestieri, 2010. "An Intensive Exploration of Technology Diffusion," NBER Working Papers 16379, National Bureau of Economic Research, Inc.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Income divergence in the face of faster technology adoption
    by Economic Logician in Economic Logic on 2013-06-27 14:14:00
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Cited by:
  1. Diego Comin & Johannes Rode, 2013. "From Green Users to Green Voters," INET Research Notes 30, Institute for New Economic Thinking (INET).
  2. Wim Naudé & Adam Szirmai, 2013. "Technological Innovation, Entrepreneurship, and Development," Working Papers 2013/17, Maastricht School of Management.
  3. Maloney, William F. & Caicedo, Felipe Valencia, 2014. "Engineers, Innovative Capacity and Development in the Americas," Policy Research Working Paper Series 6814, The World Bank.
  4. Maloney, William F. & Caicedo, Felipe Valencia, 2014. "Engineers, Innovative Capacity and Development in the Americas," IZA Discussion Papers 8271, Institute for the Study of Labor (IZA).

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