Catching Up, Forging Ahead, and Falling Behind

A widely entertained hypothesis holds that, in comparisons among countries, productivity growth rates tend to vary inversely with productivity levels. A century of experience in a group of presently industrialized countries supports this hypothesis and the convergence of productivity levels it implies. The rate of convergence, however, varied from period to period and showed marked strength only during the first quarter-century following World War II. The general process of convergence was also accompanied by dramatic shifts in countries' productivity rankings. The paper extends the simple catch-up hypothesis to rationalize the fluctuating strength of the process and explores the connections between convergence itself and the relative success of early leaders and latecomers.