Engines of Growth: Domestic and Foreign Sources of Innovation

Jonathan Eaton and Samuel Kortum

Boston University - Institute for Economic Development from Boston University, Institute for Economic Development

Abstract: We examine productivity growth since World War II in the five leading research economies: West Germany, France, the United Kingdom, Japan, and the United States. Available data on the capital-output ratio suggests that these countries grew as they did because of their ability to adopt more productive technologies, not because of capital deepening per se. We present a multicountry model of tech- nological innovation and diffusion which has the implication that, for a wide range of parameter values, countries converge to a common growth rate, with relative productivities depending on the speed with which countries adopt technologies developed at home and abroad. Using parameter values that fit a cross section of data on productivity, research, and patenting, we simulate the growth of the five countries, given initial productivity levels in 1950 and research efforts in the sub- sequent four decades. Based on plausible assumptions about "technology gaps" that existed among these countries in 1950 we can explain their growth experi- ences quite successfully. Specifically, the simulations capture the magnitude of the slowdown in German, French, and Japanese productivity growth and the relative constancy of U.K. and U.S. growth.

Date: 1995-06
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Engines of growth: Domestic and foreign sources of innovation (1997)
Working Paper: Engines of growth: domestic and foreign sources of innovation (1995)
Working Paper: Engines of Growth: Domestic and Foreign Sources of Innovation (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:bosecd:63

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