Economic Growth Second Edition

8
The Diffusion of Technology
349
8.1
Behavior of Innovators in the Leading Country
351
8.2
Behavior of Imitators in the Follower Country
352
8.2.1
Producers of Final Output
352
8.2.2
Imitating Firms
353
8.2.3
Consumers
357
8.2.4
Steady-State Growth
357
8.2.5
The Dynamic Path and Convergence
359
8.3
Constant (or Slowly Rising) Costs of Imitation
363
8.3.1
The Steady State
364
8.3.2
Transitional Dynamics
365
8.4
Foreign Investment and Intellectual Property Rights
368
8.5
General Implications for Growth Rates in Follower Countries
370
8.6
Switchovers of Technological Leadership, Leapfrogging
373
8.7
Welfare Considerations
376
8.8
Summary Observations about Diffusion and Growth
379
8.9
Problems
380
9
Labor Supply and Population
383
9.1
Migration in Models of Economic Growth
383
9.1.1
Migration in the Solow–Swan Model
384
9.1.2
Migration in the Ramsey Model
393
9.1.3
The Braun Model of Migration and Growth
398
9.2
Fertility Choice
407
9.2.1
An Overlapping-Generations Setup
408
9.2.2
The Model in Continuous Time
411
9.3
Labor/Leisure Choice
422

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Contents
xi
9.4
Appendix: The Form of the Utility Function with Consumption
and Work Effort
427
9.5
Problems
428
10
Growth Accounting
433
10.1 Standard Primal Growth Accounting
433
10.1.1
Basic Setup
433
10.1.2
Measuring Inputs
436
10.1.3
Results from Growth Accounting
438
10.1.4
A Note on Regression-Based Estimates of TFP Growth
441
10.2 Dual Approach to Growth Accounting
442
10.3 Problems with Growth Accounting
444
10.3.1
An Increasing-Returns Model with Spillovers
445
10.3.2
Taxes
447
10.3.3
Multiple Types of Factors
449
10.4 TFP Growth and R&D
450
10.4.1
Varieties Models
451
10.4.2
Quality-Ladders Models
454
10.5 Growth Accounting Versus Sources of Growth
457