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Innovation And Inequality In A Small World

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  • Ines Lindner
  • Holger Strulik

Abstract

We present a multicountry theory of economic growth and R&D‐driven technological progress in which countries are connected by a network of knowledge exchange. Technological progress in any country depends on the state of technology in the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality, followed by decreasing relative inequality. Knowledge diffusion through a small world network produces an extraordinary diversity of country growth performances, including the overtaking of individual countries and the replacement of the technologically leading country in the course of world development.

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  • Ines Lindner & Holger Strulik, 2020. "Innovation And Inequality In A Small World," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 683-719, May.
    • Handle: RePEc:wly:iecrev:v:61:y:2020:i:2:p:683-719
    DOI: 10.1111/iere.12437
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    More about this item

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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