Sources of Indigenous Innovation and Channels of Its Transmission across Countries

The data patterns presented in Chapter 1 made clear that the analysis of TFP growth and innovation over a long time horizon needs to accommodate for the likely existence of multiple sources of indigenous innovation. At the very least, the data imply that in the early 20th century there were at least two countries that were generating innovation, which afterward spread over the world: the UK and the US. Otherwise, the US would never have been able to catch up and surpass the UK in generating the world’s best practices. Yet most existing empirical analysis of macro-and industry-level productivity trends