Technological learning, social learning and
Raaj Kumar Sah and Joseph E. Stiglitz
In: Manpower and transfer, edited by Sukhamoy Chakravarty. Chapter 12, pages 285-298. In: The balance between industry and agriculture in economic development. Volume 3. Macmillan Press, London, UK, 1989.
(Post-publication note. This chapter does not include an abstract. The excerpts below are from the chapter.)
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A central puzzle facing development economists is why it is that the growth rates and income levels of various countries have not converged faster than they have. Traditional neoclassical growth theory predicts that, in the long run, the growth rates in all countries should be related only to the rate of technological progress and of population growth; growth rates in per capita incomes should be related only to the rate of labour augmenting technological progress; and differences in levels of per capita consumption should be related to differences in savings rates.
This paper presents two different perspectives providing alternative explanations of the non-convergence. One is based on certain characteristics of technology. The other is based on socioeconomic considerations. The two perspectives have quite different policy implications.