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The new era of unconditional convergence

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  • Patel, Dev
  • Sandefur, Justin
  • Subramanian, Arvind

Abstract

The central fact that has motivated the empirics of economic growth—namely unconditional divergence—is no longer true and has not been so for decades. Across a range of data sources, poorer countries have in fact been catching up with richer ones, albeit slowly, since the mid-1990s. This new era of convergence does not stem primarily from growth moderation in the rich world but rather from accelerating growth in the developing world, which has simultaneously become remarkably less volatile and more persistent. Debates about a “middle-income trap” also appear anachronistic: middle-income countries have exhibited higher growth rates than all others since the mid-1980s.

Suggested Citation

  • Patel, Dev & Sandefur, Justin & Subramanian, Arvind, 2021. "The new era of unconditional convergence," Journal of Development Economics, Elsevier, vol. 152(C).
  • Handle: RePEc:eee:deveco:v:152:y:2021:i:c:s030438782100064x
    DOI: 10.1016/j.jdeveco.2021.102687
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    More about this item

    Keywords

    Growth; Convergence; Middle-income trap; Persistence; Solow model; Volatility;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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