The Knowledge-Diffusion Bottleneck in Economic Growth and Development

Mark Staley ()

MPRA Paper from University Library of Munich, Germany

Abstract: If learning and teaching were easy, the whole world would be developed and frontier knowledge would spread quickly. But learning is difficult and there is a finite capacity for teaching. The concept of a knowledge-diffusion ``bottleneck'' can be used to explain why there is a negative correlation between per-capita income growth rates and fertility rates, especially amongst countries that are in the early stages of industrialization. It can also explain why income distributions in rich countries have power-law tails (both upper and lower) and why income growth rates are independent of scale. A simple model of knowledge diffusion is calibrated to the observed paths of structural transformation in newly-industrializing countries. The resulting parameters are found to be consistent with the tail exponents seen in U.S. income data, suggesting a common mechanism of knowledge diffusion operating in developing countries and fully-developed countries.

Keywords: Growth; Diffusion; Development; Bottleneck (search for similar items in EconPapers)
JEL-codes: E00 O10 (search for similar items in EconPapers)
Date: 2018-06-09
New Economics Papers: this item is included in nep-gro and nep-knm
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87255

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