Appropriate Technology and Growth

Abstract

We model growth and technology transfer in a world where technologies are specific to particular combinations of inputs. Unlike the usual specification, our model does not imply that an improvement in one technique for producing a given good improves all other techniques for producing that good. Technology improvements diffuse slowly across countries, although knowledge spreads instantaneously and there are no technology adoption costs. However, even with “<it>Ak</it>” production, our model implies conditional convergence. This model, with appropriate technology and technology diffusion, has more realistic predictions for convergence and growth than either the standard neoclassical model or simple endogenous-growth models.