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Appropriate Technology and Growth

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  • Susanto Basu
  • David N. Weil

Abstract

We present a model of growth and technology transfer based on the idea that technologies are specific to particular combinations of inputs. We argue that this model is more realistic than the usual specification, in which an improvement in any technique for producing a given good improves all other techniques for producing that good. Our model implies that technology improvements will diffuse only slowly, even if there are no barriers to the flow of knowledge and no adoption costs. On the other hand, although our basic production technology is of the `Ak' variety, technology diffusion implies that countries with identical policies and different initial incomes do eventually converge to the same level of per-capita income. We argue that a model with appropriate technology and technology diffusion is more appealing, and has more realistic predictions for long-run convergence and growth, than either the standard neoclassical model or simple endogenous-growth models.

Suggested Citation

  • Susanto Basu & David N. Weil, 1996. "Appropriate Technology and Growth," NBER Working Papers 5865, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5865
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    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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