Technology-gap and cumulative growth: models, results and performances

Addressing the question ‘why productivity growth rates differ between countries’ from a dis-equilibrium standpoint, in the present paper it is explored the possibility to compound in a single formalization two different but complementary theories of technical change and macroeconomic growth, that is the Kaldorian idea of cumulative causation and the technology-gap approach to economic growth. In order to investigate the complementarities between these two approaches, a two-country macroeconomic model of technology-gap and cumulative growth is presented, built on previous contributions by Verspagen (1993), Amable (1993) Targetti and Foti (1997) and Ledesma (1999a). The analytical solutions of the model for the growth rates of productivity and demand, and the dynamics of the technology-gap show the existence of a large set of possible outcomes: the follower country can fall behind, partly or totally catch up, or overtake the leader. Moreover, even if the follower is able to close the technology-gap, not necessarily it will also be able to close the growth rate differential. The empirical evidence on the experience of 26 OECD countries in the period 19911999 points out the relevance of the model for explaining the recent performances of technological activities and productivity growth.