July 18, 2018

The Great Divergence

This video explains how technology diffusion contributes to the growing productivity gap between rich and poor countries.

We’re told that we live in a flat world in which technology makes geography less important to where jobs are located. And yet, the productivity gap between rich and poor countries has grown dramatically over the past two centuries and continues to expand. It is called the Great Divergence. A paper in the July issue of American Economic Journal: Macroeconomics says access to technology isn’t the main issue anymore. Rather, it is how intensely countries use the latest tools to become more productive.