Koren, Miklos; Tenreyro, Silvana - London School of Economics (LSE) - 2007
economies growth rates tend to be relatively stable. To explain this pattern, we propose a theory of technological … diversification. Production makes use of different input varieties, which are subject to imperfectly correlated shocks. Technological … progress takes the form of an increase in the number of varieties, raising average productivity. In addition, the expansion in …