This is not to suggest that the MRW specification of the Solow model is falsely based on
factor accumulation as the decisive explanatory variable. What has largely gone unnoticed in
the applied literature is that the MRW specification is neither based on factor accumulation
nor on technology as explanatory variables, but on a variable that is presumed to be a constant
in the Solow model, namely the capital–output ratio. At this point one may ask with some
justification whether it is reasonable to apply the Solow model to a cross-country context
at all. My answer to this question is borrowed from a well-known paper on the empirical
analysis of growth, which was written in 1957. Either this kind of empirical analysis appeals
or it does not; if it does, I think one can draw some crude but useful conclusions from the
results, but not necessarily in the way suggested by MRW.
I develop my argument in three steps. The next section applies the textbook Solow diagram
to a cross-country context and highlights the implication that differences in technology