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The Great Divergence: A Network Approach

Ines Lindner () and Holger Strulik ()

No 5638, CESifo Working Paper Series from CESifo Group Munich

Abstract: We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge exchange. Knowledge in any country depends on the human capital of the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by decreasing relative inequality. Knowledge diffusion through a Small World network explains the ‘New Kaldor facts’ and produces an extraordinary diversity of country growth performances, including the overtaking of individual countries in the course of world development.

Keywords: networks; knowledge diffusion; economic growth; world income distribution (search for similar items in EconPapers)
JEL-codes: O10 O40 D62 D85 F41 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: The Great Divergence: A Network Approach (2015) Downloads
Working Paper: The Great Divergence: A Network Approach (2014) Downloads
Working Paper: The great divergence: A network approach (2014) Downloads
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