where A(0) stands for the initial level of a narrow concept of technical knowledge that is
the same for all countries, and Xk may capture factors k = 1, . . . , l such as institutions and
other potential determinants of development that differ across countries but remain fairly
stable over time. Equation (5) suggests that persistent differences in X across countries would
explain persistent differences across country-specific production functions, which in turn
would shift over time owing to the common constant rate g.