The postwar boom of 1950–73 appears to fall in the time band of a Kondratieff wave upswing; however, the evidence presented in the previous chapters suggests that the Kondratieff wave is noted by its absence before 1950. Hence, the postwar boom needs to be understood in unique historical terms. The major influence behind the long-run growth variations of the world economy before 1950 arose from the combined effects of an underlying catching-up growth process and the impact of shocks. The 1950–73 rapid growth era can also be understood as a catching-up wave under different initial conditions from the high-growth path of the world economy during the period 1890–1929.

The technological gap

The factors accounting for the existence of rapidly growing economies at different stages of world economic development have been discussed extensively in the historical growth literature. Some of the more important aspects are as follows.

1. (i) Late developers have the advantage of flexible labour supplies (Kaldor, 1966: Kindleberger, 1967).

2. (ii) If the cost of moving from a lower to a higher technology is an increasing function of the level of technology, then the rate of development will slow down as the country develops. Countries with a lower level of technology will have a greater potential for growth since the transition costs of moving from one technology to another are lower (Ames and Rosenberg, 1971).

3. […]