We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge … knowledge throughout the world explains a period of increasing world inequality after the take-off of the forerunners of the … industrial revolution, followed by decreasing relative inequality. Knowledge diffusion through a Small World network explains the …

-degenerate world income distribution. In accordance with the empirical literature, I find that country characteristics such as the … policies such as subsidies to innovation investments explain a country's position in the eventual world income distribution …