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If Technology Has Arrived Everywhere, Why has Income Diverged?

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  • Diego A. Comin
  • Martí Mestieri Ferrer

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.

Suggested Citation

  • Diego A. Comin & Martí Mestieri Ferrer, 2013. "If Technology Has Arrived Everywhere, Why has Income Diverged?," NBER Working Papers 19010, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19010
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    References listed on IDEAS

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    1. Oded Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," American Economic Review, American Economic Association, vol. 96(2), pages 299-303, May.
    2. Robert E. Lucas, 2000. "Some Macroeconomics for the 21st Century," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 159-168, Winter.
    3. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
    4. Barro, Robert J & Sala-i-Martin, Xavier, 1997. "Technological Diffusion, Convergence, and Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 1-26, March.
    5. Comin, D. & Hobijn, B., 2004. "Cross-country technology adoption: making the theories face the facts," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 39-83, January.
    6. 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.
    7. Diego A. Comin & Martí Mestieri, 2010. "An Intensive Exploration of Technology Diffusion," NBER Working Papers 16379, National Bureau of Economic Research, Inc.
    8. 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 249-283, April.
    9. 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.
    10. 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.
    11. 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.
    12. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
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    Citations

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    Cited by:

    1. Raphael Bergoeing & Norman V. Loayza & Facundo Piguillem, 2016. "The Whole is Greater than the Sum of Its Parts: Complementary Reforms to Address Microeconomic Distortions," World Bank Economic Review, World Bank Group, vol. 30(2), pages 268-305.
    2. World Bank, "undated". "World Bank East Asia and Pacific Economic Update, April 2016," World Bank Other Operational Studies 24015, The World Bank.
    3. Wim Naudé & Adam Szirmai, 2013. "Technological Innovation, Entrepreneurship, and Development," Working Papers 2013/17, Maastricht School of Management.
    4. Stephen Ayerst, 2016. "Idiosyncratic Distortions and Technology Adoption," Working Papers tecipa-571, University of Toronto, Department of Economics.
    5. Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2017. "Technology-specific Production Functions," Working Paper series 17-26, Rimini Centre for Economic Analysis.
    6. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    7. William F. Maloney & Felipe Valencia Caicedo, 2017. "Engineering Growth: Innovative Capacity and Development in the Americas," CESifo Working Paper Series 6339, CESifo Group Munich.
    8. Naude, Wim & Nagler, Paula, 2015. "Industrialisation, Innovation, Inclusion," MERIT Working Papers 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Diego Comin & Johannes Rode, 2013. "From Green Users to Green Voters," NBER Working Papers 19219, National Bureau of Economic Research, Inc.
    10. Jeanjean, François & Houngbonon, Georges Vivien, 2015. "Optimal Number of Firms in the Wireless Markets," 26th European Regional ITS Conference, Madrid 2015 127153, International Telecommunications Society (ITS).
    11. Maloney, William F. & Valencia, Felipe Caicedo, 2014. "Engineers, Innovative Capacity and Development in the Americas," IZA Discussion Papers 8271, Institute for the Study of Labor (IZA).
    12. repec:eee:respol:v:46:y:2017:i:7:p:1340-1359 is not listed on IDEAS
    13. Dan ANDREWS & Chiara CRISCUOLO & Dirk PILAT, 2015. "The Future of Productivity Improving the Diffusion of Technology and Knowledge," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(100), pages 85-105, 4th quart.
    14. A. Bergeaud & G. Cette & R. Lecat, 2016. "The role of production factor quality and technology diffusion in 20th century productivity growth," Working papers 588, Banque de France.

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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