The question is whether the MRW translation of the textbook Solow diagram into a
cross-country context really captures the central insight of the Solow model, or is simply
motivated by the availability of cross-country measures of output and investment in the large
international data set that has become available since the 1980s (Summers and Heston, 1988)
and is now referred to as the Penn World Tables (PWT).2 Standard textbook exercises apart,
steady-state growth in the Solow model implies a shift of the production function rather than a
movement along a production function, and more precisely a shift of the production function
along a constant capital–output ratio, as presented in Figure 2. Translating Figure 2 into a
cross-country context appears to imply either a regression of output per worker on the level
of technology conditional on a constant capital–output ratio, or a growth accounting exercise
to estimate a residual measure of the level of technology, which is the approach chosen by
KRC.