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Drivers of unconditional income convergence

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  • AlKathiri, Nader

Abstract

We decompose economic growth into technical efficiency change, technological change, and capital accumulation to analyze the drivers of unconditional income convergence across countries observed in recent decades. Our analysis suggests that technical efficiency improvement and capital accumulation are the main drivers of the observed unconditional convergence. Specifically, developing countries experienced faster efficiency improvement than developed countries in the period of unconditional convergence (1995–2019), which was not the case in the preceding period characterized by the lack of income convergence (1970–1995).

Suggested Citation

  • AlKathiri, Nader, 2024. "Drivers of unconditional income convergence," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523005025
    DOI: 10.1016/j.econlet.2023.111476
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    References listed on IDEAS

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    1. Giraleas, Dimitris & Emrouznejad, Ali & Thanassoulis, Emmanuel, 2012. "Productivity change using growth accounting and frontier-based approaches – Evidence from a Monte Carlo analysis," European Journal of Operational Research, Elsevier, vol. 222(3), pages 673-683.
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    4. Kinfemichael, Bisrat & Morshed, A.K.M. Mahbub, 2019. "Unconditional convergence of labor productivity in the service sector," Journal of Macroeconomics, Elsevier, vol. 59(C), pages 217-229.
    5. Michael Kremer & Jack Willis & Yang You, 2022. "Converging to Convergence," NBER Macroeconomics Annual, University of Chicago Press, vol. 36(1), pages 337-412.
    6. Subodh Kumar & R. Robert Russell, 2002. "Technological Change, Technological Catch-up, and Capital Deepening: Relative Contributions to Growth and Convergence," American Economic Review, American Economic Association, vol. 92(3), pages 527-548, June.
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    8. Nader AlKathiri, 2022. "Labour productivity growth and convergence in manufacturing: A nonparametric production frontier approach," Applied Economics, Taylor & Francis Journals, vol. 54(4), pages 406-429, January.
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    More about this item

    Keywords

    Economic growth; Income convergence; Income divergence; Production frontier; Technological change;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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