If Technology Has Arrived Everywhere, Why has Income Diverged?
We study the lags with which new technologies are adopted across countries, and their long-run penetration rates once they are adopted. Using data from the last two centuries, we document two new facts: there has been convergence in adoption lags between rich and poor countries, while there has been divergence in penetration rates. Using a model of adoption and growth, we show that these changes in the pattern of technology diffusion account for 80% of the Great Income Divergence between rich and poor countries since 1820.
We are grateful to Thomas Chaney, Christian Hellwig, Chad Jones, Pete Klenow, Franck Portier, Mar Reguant and seminar participants at Boston University, Brown University, CERGE-EI, Edinburgh, HBS, LBS, Minnesota Fed, Stanford GSB, UAB, Univeristy of Toronto and TSE for useful comments and suggestions. Comin acknowledges the generous support of INET. All remaining errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Diego Comin & Martí Mestieri, 2018. "If Technology Has Arrived Everywhere, Why Has Income Diverged?," American Economic Journal: Macroeconomics, vol 10(3), pages 137-178. citation courtesy of