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The Productivity Convergence Debate: A Theoretical and Methodological Reconsideration

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  • Bruce Elmslie
  • William Milberg
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    Abstract

    Two fundamental issues have been ignored in the convergence debate which are addressed in this paper. First, there has been little attention paid to the development of a general model able to explain convergence a divergence. Second, in the rush to put data to a convergence hypothesis, researchers have failed to consider certain methodological procedures with respect to the treatment of capital. To remedy this problem we use an input-output approach to measure catch-up. To address the theoretical lacunae we present case studies of Portugal and Japan, two countries which by 1959 had attained the threshold level of development required to join the “convergence- club”, but which, for various historical (path-dependent) reasons, have diverged rapidly from each other in the period since the late 1950’s.

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    File URL: http://www.levyinstitute.org/pubs/wp120.pdf
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    Bibliographic Info

    Paper provided by Levy Economics Institute, The in its series Economics Working Paper Archive with number wp_120.

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    Date of creation: Jun 1994
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    Handle: RePEc:lev:wrkpap:wp_120

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    1. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
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