Consider, then, variations across countries in 'technology' - its level and rate of change. This seems to me to be the one factor isolated by the neoclassical model that has the potential to account for wide differences in income levels and growth rates. This point of departure certainly does accord with everyday usage. We say that Japan is technologically more advanced than China, or that Korea is undergoing unusually rapid technical change, and such statements seem to mean something (and I think they do). But they cannot mean that the 'stock of useful knowledge' [in Kumets's (1959) terminology] is higher in Japan than in China, or that it is growing more rapidly in Korea than elsewhere. 'Human knowledge' is just human, not Japanese or Chinese or Korean. I think when we talk in this way about differences in 'technology' across countries we are not talking about 'knowledge' in general, but about the knowledge of particular people, or perhaps particular subcultures of people. If so, then while it is not exactly wrong to describe these differences by an exogenous, exponential term like A( t ) neither is it useful to do so. We want a formalism that leads us to think about individual decisions to acquire knowledge, and about the consequences of these decisions for productivity. The body of theory that does this is called the theory of 'human capital', and I am going to draw extensively on this theory in the remainder of these lectures. For the moment, however, I simply want to impose the terminological convention that 'technology' - its level and rate of change - will be used to refer to something common to all countries, something 'pure' or 'disembodied', some- thing whose determinants are outside the bounds of our current inquiry.