The paper presents a North-South model in which the long run rate of growth of the South depends on technological learning and structural change. It takes as a point of departure the Balance-of-Payments-constrained growth model, which provides useful insights on the necessary conditions for sustained convergence. It is suggested that this requires that the ratio between the income elasticity of the demand for exports and imports to be higher than the unity. In turn, income elasticities are a function of the technology gap and of the patterns of specialization of the economy. The model allows for discussing how the interplay between the productive structure of the South and the dynamics of the technology gap shapes North-South relative rates of growth (and hence convergence or divergence) and relative wages in the long run. The paper also addresses the influence of policy and institutional variables by allowing key parameters in the model to vary.
Structuralist macroeconomics; Economic growth; Innovation and technologic diffusion; Conditional convergence
