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INNOVATION AND INEQUALITY IN A SMALL WORLD
Author(s) -
Lindner Ines,
Strulik Holger
Publication year - 2020
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12437
Subject(s) - overtaking , inequality , economics , developing country , economic geography , small world network , technological change , development economics , economic growth , macroeconomics , complex network , engineering , computer science , mathematical analysis , civil engineering , mathematics , world wide web
We present a multicountry theory of economic growth and R&D‐driven technological progress in which countries are connected by a network of knowledge exchange. Technological progress in any country depends on the state of technology in the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality, followed by decreasing relative inequality. Knowledge diffusion through a small world network produces an extraordinary diversity of country growth performances, including the overtaking of individual countries and the replacement of the technologically leading country in the course of world development.