R&D, Implementation and Stagnation: A Schumpeterian Theory of Convergence Clubs

41 Pages Posted: 16 Aug 2002

See all articles by Peter Howitt

Peter Howitt

Brown University - Department of Economics; National Bureau of Economic Research (NBER)

David Mayer-Foulkes

Centro de Investigación y Docencia Económicas (CIDE) - Division of Economics

Date Written: August 2002

Abstract

We construct a Schumpeterian growth theory consistent with the divergence in per-capita income that has occurred between countries since the mid 19th Century, and with the convergence that occurred between the richest countries during the second half of the 20th Century. The theory assumes that technological change underwent a transformation late in the 19th Century, associated with modern R&D labs. Countries sort themselves into three groups. Those in the highest group converge to a steady state where they do leading edge R&D, while those in the intermediate group converge to a steady state where they implement technologies developed elsewhere. Countries in both of these groups grow at the same rate in the long run, as a result of technology transfer, but inequality between them increases during the transition. Countries in the lowest group grow at a slower rate, with relative incomes that fall asymptotically to zero. Once modern R&D has been introduced, a country may have only a finite window of opportunity in which to introduce the institutions that support it.

Suggested Citation

Howitt, Peter and Mayer-Foulkes, David, R&D, Implementation and Stagnation: A Schumpeterian Theory of Convergence Clubs (August 2002). NBER Working Paper No. w9104. Available at SSRN: https://ssrn.com/abstract=324046

Peter Howitt (Contact Author)

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-2145 (Phone)
401-863-1970 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David Mayer-Foulkes

Centro de Investigación y Docencia Económicas (CIDE) - Division of Economics ( email )

Carretera Mexico Toluca 3655
01210 Mexico, D.F.
Mexico
+52 55 5727 9839 (Phone)
+52 55 5727 9878 (Fax)

HOME PAGE: http://www.cide.edu/investigador/profile.php?IdInvestigador=25

Register to save articles to
your library

Register

Paper statistics

Downloads
48
Abstract Views
1,140
PlumX Metrics