Solow (1956) as a Model of Cross-Country Growth Dynamics

Kieran McQuinn and Karl Whelan ()

MPRA Paper from University Library of Munich, Germany

Abstract: Despite the widespread popularity of the Solow growth model, much of the recent empirical work based on the classic framework misrepresents a crucial feature of the model. Namely, the growth rate of technological progress, assumed to be exogenous in the Solow model, is often identified as being constant across countries. This simplification of the behavior of technological progess runs counter to the evidence and has had a number of significant implications for the interpretation of the Solow model. One implication has been an overemphasis on the role of factor accumulation in explaining cross-country income differentials. In addition, the commonly-cited empirical result that the speed of conditional convergence is slower than predicted by the Solow model is a function of this inaccurate assumption about technology rather than due to a failure of the model itself.

Keywords: Solow; Growth; TFP (search for similar items in EconPapers)
JEL-codes: O41 O47 (search for similar items in EconPapers)
Date: 2007-01
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (4)

Published in Oxford Review of Economic Policy 1.23(2007): pp. 45-62

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Related works:
Journal Article: Solow ( 1956 ) as a model of cross-country growth dynamics (2007)
Working Paper: Solow (1956) as a Model of Cross-Country Growth Dynamics (2007)
Working Paper: Solow (1956) as a model of cross-country growth dynamics (2007)
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