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Title: Convergence Across Countries And Regions: Theory And Empirics

Author(s): Angel de la Fuente

Publication Date: May 2000

Keyword(s): Convergence and Growth

Programme Area(s): International Macroeconomics

Abstract: This paper surveys the recent literature on convergence across countries and regions. We discuss the main convergence and divergence mechanisms identified in the literature and develop a simple model that illustrates their implications for income dynamics. We then review the existing empirical evidence and discuss its theoretical implications. Early optimism concerning the ability of a human capital-augmented neoclassical model to explain productivity differences across economies has been questioned on the basis of more recent contributions that make use of panel data techniques and obtain theoretically implausible results. Some recent research in this area tries to reconcile these findings with sensible theoretical models by exploring the role of alternative convergence mechanisms and the possible shortcomings of panel data techniques for convergence analysis.

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Bibliographic Reference

de la Fuente, A. 2000. 'Convergence Across Countries And Regions: Theory And Empirics'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2465