cONVERGENCE HYPOTHESIS REVISITED: THE TIME DIMENSION OFINCOME CONVERGENCE
Project no. 860 · Status: Kapanmış (Yayın bekleniyor) · 2018
Summary
This project aims at evaluating the convergence hypothesis at the time dimension proposed by the neoclassical growth theory. The convergence hypothesis predicts that the income gap between the countries that are at the initial stages of capital accumulation process and those with accumulated capital stock by emphasizing the difference between the marginal productivities in favor of the former. The hypothesis was tested many times up today and no consensus was achieved. Nevertheless, to our best knowledge, there is no study examining the time needed for a catch-up. This project first analyzes if there is a catch-up with the income per capita of the USA for 120 non-oil producer countries for the period of 1987-2011. The results suggest that there is a divergence, rather than a convergence, to the US income level. If they continue to grow at the average growth rate of last ten years, the average income level of countries in the sample will converge to the 2011 income per capita of the USA in 58 years.