Working Paper: CEPR ID: DP1255
Authors: robert j barro; xavier salaimartin
Abstract: We construct a model that combines elements of endogenous growth with the convergence implications of the neoclassical growth model. In the long run the world growth rate is driven by discoveries in those economies that lead in their use of technology. Followers converge towards leaders because copying is cheaper than innovation over some range. A tendency for copying costs to increase reduces followers' growth rates and thereby generates a pattern of conditional convergence. We discuss how countries are selected to be technological leaders, and we assess welfare implications. Poorly-defined intellectual property rights imply that leaders have insufficient incentive to invent and followers have excessive incentive to copy.
Keywords: technological diffusion; convergence; growth; R&D models
JEL Codes: O3; O4; O34; O41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological leaders (O33) | follower economies' growth through imitation (O49) |
| Decreasing availability of innovations (O39) | growth rates of followers (O42) |
| Costs of imitation (L15) | growth rates of followers (O42) |
| Poorly defined intellectual property rights (O34) | innovation incentives for leaders (O31) |
| Poorly defined intellectual property rights (O34) | excessive incentives to imitate for followers (C92) |