Working Paper: CEPR ID: DP9466
Authors: Diego Comin; Mart Mestieri
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.
Keywords: great divergence; technology diffusion; transitional dynamics
JEL Codes: E13; O14; O33; O41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Changes in technology adoption lags (O33) | Income growth (O49) |
| Changes in penetration rates (F61) | Income growth (O49) |
| Convergence in adoption lags (F62) | Reduction in income gap (F62) |
| Divergence in penetration rates (F62) | Widening income gap (D31) |
| Changes in technology diffusion patterns (O33) | Income divergence (D31) |