We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge … country depends on its connections to the rest of the world and on the human capital of the countries it is exchanging … knowledge with. We show how the diffusion of knowledge through the world explains the evolution of global income inequality. It …

-state share of long-term U.S. bond holdings increases in the rest-of-the-world portfolio, as the elasticity of substitution …