What Remains of Cross-Country Convergence?

Abstract

We examine the record of cross-country growth over the past 50 years and ask if developing countries have made progress on closing income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they have not and then survey the literature on absolute convergence with particular emphasis on that from the last decade or so. That literature supports our conclusion of a lack of progress in closing the income gap between countries. We close with a brief examination of the recent literature on cross-individual distribution of income which finds that, despite the lack of progress on cross country convergence, global inequality has tended to fall since 2000. (JEL E01, E13, O11, O47, F41, F62)

Historical evolution of global inequality in carbon emissions and footprints versus redistributive scenarios

“…First, inequality has been and remains high between countries. Although there has long been hope for income convergence between rich countries and developing ones based on theoretical claims from neoclassical economic growth models about catch-up to the technology frontier, there is no evidence that developing countries as a group have converged with their highincome peers over the last 50 years, not even in terms of purchasing power parity (Johnson and Papageorgiou, 2020). This reflects the organization of the global economy: international trade and investment occur in the structured context of global capitalism.…”

Spatial Correlation, Trade, and Inequality: Evidence from the Global Climate

“…Finally, this paper speaks to the growing empirical literature examining how anthropogenic climate change may affect inequality across countries, which could provide a new consideration for the long-running discussion of cross-country convergence (Barro, 1991;Johnson and Papageorgiou, 2018). Prior research employing reduced-form estimates from historical local temperature variation projects increased dispersion in various economic outcomes across countries under climate change (Dell, Jones and Olken, 2012;Burke, Hsiang and Miguel, 2015).…”

Lack of Global Convergence and the Formation of Multiple Welfare Clubs across Countries: An Unsupervised Machine Learning Approach

“…In the study of long-run macroeconomics, a central topic is the empirical testing of the convergence hypothesis across countries (Johnson and Papageorgiou 2018). Differences across countries are conceptually defined in terms of living standards or national welfare.…”