Technological Change, Technological Catch-up, and Capital Deepening: Relative Contributions to Growth and Convergence During 90’s

In this paper we investigate three sources of economic growth and evolution of world income distribution during the 90’s: (i) technological change, (ii) efficiency change (the catching-up) and (iii) capital deepening. Our research is an extension to recent study of Kumar and Russell (2002), which we complement in two ways: we considering a more recent period (the 90’s instead of 1965-90) and, as a result, we include data on transitional economies. In contrast to study by Kumar and Russell (2002), which concluded that the capital deepening was the major force of growth and of changing the world income distribution over 1965-1990, our analysis shows that, during the 90’s, this major force was technological change, whereas capital accumulation played the minor role. JEL Classification: O47, P27, P52.