Economics and Business Review

Abstract: The paper proposes a novel approach to the theoretical interpretation of the observed wide variation of economic growth rates between countries and over time. It argues for the need to have two distinctly different classes of theories of economic growth, one for the countries of Technology Frontier Area (TFA), another one for all the other countries. The two classes are outlined and some specific theories are discussed. The paper also discusses the long-term dynamics of the innovation rate and the rate of economic growth. The empirical part offers a new list of stylized facts for the TFA countries and another one for the non-TFA countries. (original abstract)