A polarization-cohesion perspective on cross-country convergence

Abstract

Understanding whether the gap between rich and poor country wellbeing is narrowing is really about whether rich and poor groups can be identified in the overall size distribution of the characteristic of interest, and how those respective subgroup size distributions are changing. Here two simple statistics for analyzing the issue are introduced which are capable of discerning, in many dimensions, changes in the underlying distributions which reflect combinations of increasing (decreasing) subgroup location differences and decreasing (increasing) subgroup spreads, which are the characteristics of polarization (de-polarization). When applied in an examination of the distribution of lifetime GDP per capita over time, the population weighted version exhibits de-polarization and the unweighted version exhibits polarization. As a collection of countries, Africa is diverging from the rest of the world regardless of the weighting scheme.

Regional Growth and Regional Decline

“…For 119 areas of Great Britain, Rice, Venables and Patacchini (2006) find a smaller, but still substantial, role for occupational composition. 13 The evidence points in a consistent direction. In the study of regional prosperity, a key question is why skilled individuals are more likely to choose to locate in some regions than others.…”

“…It is unlikely to be an accident that much of China's industrial development has been concentrated on its coast, or that Brazil's interior is poorer than its coastal cities. Even for a well-integrated, developed economy such as the US, much activity is located on the coast, while 13 These findings are based on a decomposition of earnings differences, but as in cross-country variance decompositions, it is not clear how covariance terms should be treated. Duranton and Monastiriotis (2002) study changes in regional wage inequality in the United Kingdom, between 1982 and 1997, and especially the divergence between London and other regions.…”

“…In the regional growth literature, his methods have been the most popular approach to the study of polarization. Some other methods are available, using various ways of defining polarization (see Anderson et al 2012 and Zhang and Kanbur 2001).…”

Persistence in Convergence and Club Formation

“…In the literature, cluster formation has been mainly analyzed as a cross section or as a repeated cross section phenomenon where a country in time period 1 is treated as a different country in period 2, see Lavezzi and Marsili (), Anderson et al . (), and Anderson et al . () and the references within.…”

Boats and Tides and “Trickle Down” Theories: What Economists Presume about Wellbeing When They Employ Stochastic Process Theory in Modeling Behavior

“…The restrictions implied by Gibrat's law for the separate poor and rich groups in both weighted and unweighted samples are rejected in all cases (frequently resulting in nonsense estimates such as negative variances and negative time parameters) though basic log normality is not rejected in any case suggesting that Kalecki's Law is the best description of the data for the individual groups. Poor and rich groups appear to be moving apart, Table 10 reports a trapezoidal measure of bi-polarization (Anderson 2010;Anderson, Leo and Linton 2012) for both weighted and unweighted samples illustrating the point and Table 11 reports differences over time. All of which may be interpreted as the poor becoming relatively poorer.…”