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Convergence? Inferences from Theoretical Models

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  • Galor, Oded

Abstract

This essay suggests that the convergence controversy may reflect, in part, differences in perception regarding the viable set of competing testable hypotheses generated by existing growth theories. It argues that in contrast to the prevailing wisdom, the traditional neo-classical growth paradigm generates the club convergence hypothesis as well as the conditional convergence hypothesis. Furthermore, the inclusion of empirically significant variables such as human capital, income distribution, and fertility in conventional growth models, along with capital market imperfections, externalities, and non-convexities, strengthens the viability of club convergence as a competing hypothesis with conditional convergence.

Suggested Citation

  • Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," CEPR Discussion Papers 1350, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1350
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    More about this item

    Keywords

    Club Convergence; Conditional Convergence; Growth; Income Distribution; Multiple Steady-state; Overlapping-generations;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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