Technological Progress under Learning by Imitation.

We analyse technological progress when knowledge has a large tacit component so that transmission of knowledge takes place through direct per-sonal imitation. It is shown that the rate of technological progress depends on the number of innovators in the same knowledge network. Assuming the dif-fusion of knowledge to mirror the geographical pattern of tradethe greater the trade between two sites, the greater the probability that technical knowl-edge ows between themwe show that a gradual expansion of trade causes a sudden rise in the rate of technological progress. JEL: O40 1 Introduction. Underlying current models of technological progress is the assumption that re-searchers stand on the shoulders of giants by having costless access to the entire stock of human knowledge. Much of technology however, and technical skill in particular, has a large tacit, do it like this element. To master a skill, it is not i