Abstract

This paper presents a model of development which is driven by matching between talents and technologies. Differences in productivity across countries are amplified by three dimensions of talent utilization: the range of talents utilized, the density of a specific talent utilized, and the average match quality in the economy. In our model higher productivity increases the number of technologies available, enhancing the opportunities for individuals to match their talents to specific technologies and increasing the returns to search. More intensive search further contributes to talent utilization.