Transitional Dynamics in an R&D-Based Growth Model with Imitation : Comparing its Predictions to the Data

Employing cross-country data, this paper evaluates the transitional dynamics predictions of a non-scale growth model of endogenous technology innovation and imitation. We show that, unlike the neoclassical growth framework, the transitional dynamics of the R&D-based growth model can account for growth 'miracles'. The additional convergence power provided by technology imitation allows the model to replicate rapid growth experiences for plausible real interest rates, and reasonable consumption and investment shares. Furthermore, our results can reconcile the big contribution of input factor accumulation to economic growth found by Young (1994. European Economic Review 38, 964--973; 1995. Quartely Journal of Economics 110, 641--680) with the importance of technology transfer