The Great Divergence: A Network Approach

Arbeitspapier

We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge exchange. Knowledge in any country depends on the human capital of the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by decreasing relative inequality. Knowledge diffusion through a Small World network explains the ‘New Kaldor facts’ and produces an extraordinary diversity of country growth performances, including the overtaking of individual countries in the course of world development.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5638

Classification and Topics

• Classification: Wirtschaft ; Economic Development: General ; Economic Growth and Aggregate Productivity: General ; Externalities ; Network Formation and Analysis: Theory ; Open Economy Macroeconomics
• Subject: networks ; knowledge diffusion ; economic growth ; world income distribution

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lindner, Ines ; Strulik, Holger
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/128341
• Last update: 10.03.2025, 11:42 AM CET