Technology and convergence

The empirical convergence literature envisages a world in which the presence or lack of convergence is a function of capital accumulation. This focus ignores a long tradition among economic historians and growth theorists which emphasises technology and the potential for technology transfer. We suggest here that this neglect is an important oversight: simple models which incorporate technology transfer provide a richer framework for thinking about convergence. Empirically, differences in technologies across countries and sectors appear to match differences in labour productivity and to exhibit interesting changes over time.