According to New Growth Theory one can not rely on the convergence mechanisms inherent in traditional neoclassical constant returns to scale models. Convergence as well as divergence is possible, in general, depending on the assumptions about technology, factor mobility and ease of knowledge...

This paper proposes a theory for the gradual evolution of knowledge diffusion and growth over the very long run. A feedback mechanism between capital accumulation and the ease of knowledge diffusion explains a long epoch of (quasi-) stasis and an epoch of high growth linked by a gradual economic...