ABSTRACT
The ‘world technological frontier’ has been defined as comprising all production methods which at any given time are either the most economical or the most productive in the world. If they are known to firms, these world-best methods would be the only candidates for selection, the actual choice depending as usual on local prices, output demands, resource endowments, and so forth. There may also be firms which know only some of the methods in question but whose choices under this limited knowledge, would remain the same as when their knowledge was complete. The collection of firms of both categories is what we call the ‘technological frontier area’ (TFA).
