In this study, a multicountry Schumpeterian growth model is constructed. Because
of technology transfer, R&D-performing countries converge to parallel growth paths;
other countries stagnate. A parameter change that would have raised a country's growth
rate in standard Schumpeterian theory will permanently raise its productivity and
per capita income relative to other countries and raise the world growth rate. Transitional
dynamics are analyzed for each country and for the world economy.