In this paper we analyze the dynamics of catching up for a backward three sector economy and investigate the transitional structural adjustment process. A theoretical model is developed to explain international development and trade patterns as a transitory process of technological catching up....

The upgrading process through imitation is analyzed for a technologically backward country in an industrialized neighborhood. Depending on human capital, trade policy and R&D expenditures, two regimes of development can be identified. A regime of increasing relative backwardness and a regime of...