CROSS-COUNTRY INCOME DIFFERENCESAND TECHNOLOGY DIFFUSION IN ACOMPETITIVE WORLD

This paper develops a new open-economy endogenous growth modelwhere technology diffusion allows for a stable and non-degenerate world incomedistribution. In accordance with the empirical literature, I find that country characteristicssuch as the social infrastructure, the degree of openness, the investmentrate, population growth, the level of human capital, or growth policies such as subsidiesto innovation investments explain a country’s position in the eventual worldincome distribution. Club convergence in growth rates can be traced back to acountry’s openness and to a minimum required level of human capital....