WORKERS, MACHINES, AND ECONOMIC-GROWTH

This paper analyzes a model of economic growth, with technological inn ovations that reduce labor requirements but raise capital requirements . The paper has two main results. The first is that such technological innovations are not everywhere adopted, but only in countries with hi gh productivity. The second result is that technology adoption signifi cantly amplifies differences in productivity between countries. This p aper can, therefore, add to our understanding of large and persistent international differences in output per capita. The model also helps t o explain other growth phenomena, like divergence or periods of rapid growth.