A theoretical and Empirical Analysis of Convergence and Catch-Up Patterns in Neighboring Areas

The goal of this paper is to study the impact of capital accumulation (convergence) and technological transfers (catch-up) on growth. By introducing transfers of technology in the Solow growth model shows two important results: (i) in the long-run, all countries converge and catch-up in rate (i.e. every country grows at the same rate) but not in level: it points out conditional or absolute catch-up and conditional or absolute convergence. (ii) because of the existence of technology diffusion, thre may be overtaking of the USA by other countries. This paper ends with empirical evidence of these two mechanisms on two different samples of countries.