The catch-up effect is the idea that up to a point developing countries can achieve greater productivity for each unit of capital invested because they have the advantage of using technologies already developed by other countries.

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The catch-up effect is indeed the idea that developing countries can achieve higher productivity with each unit of capital invested, thanks to being able to use technologies already developed by other countries. This allows them to catch up with more advanced economies.

The Catch-Up Effect Is the Idea That Up to a Point