We propose a sectoral–shift theory of aggregate factor productivity for a class of economies with AK technologies … persistent endogenous fluctuations in the sectoral distribution of physical capital which, in turn, responds to reversible … exogenous shifts in relative sector productivities. Surplus capital from less productive sectors is lent to more productive ones …

A framework is developed with what we call technology capital. A country is a measure of locations. Absent policy … constraints, a firm owning a unit of technology capital can produce the composite output good using the unit of technology capital … is what constrains the number of units it operates using this unit of technology capital. If it has two units of …