What Does The Solow Model Tell Us About Economic Growth ? : Complete and Partial Cross - country

This paper presents, within a framework of the Solow model, evidence that there should be two different reasons for convergence. One is due to diminishing returns to capital and the other is due to technological diffusion. This paper shows that OECD and low income countries follow a pattern of conditional convergence but middle income countries do not. This seems to imply that technological diffusion has a very large effect only on middle income countries because technologies are partially excludable across countries. In other words, technologies are easily diffused in middle income countries but not in low income countries. JEL Classification:O30, O40, O57