Technology transfer, income distribution and the process of economic development

This paper studies the role of income distribution and technology transfer in the process of economic development. A novel aspect of the model is that the composition of human capital as well as the level affect economic growth. Utilizing an overlapping-generations model in which income distribution changes endogenously, we present an economic explanation for why some countries could not start modern economic growth; why some countries took off but have apparently stopped growing after some time; and why some countries have successfully developed and continue to grow.