Appropriate Technology: Five Growth Puzzles Solved?

Abstract

This paper is motivated by the idea of "appropriate technology" and its implications for economic growth. Consistent with a simple model, some evidence is presented that efficiency growth rates are positively correlated with capital-labour ratios across countries. It is argued that this correlation can help explain international TFP differences and some other findings of previous researchers, including five puzzles that have emerged from the empirical growth literature.

JEL Classification: O32, O4