Convergence Clubs and Diverging Economies

This paper focuses on the question of income convergence among countries. It examines the incidence of reduction in income gaps among countries at different levels of development. Some evidence is found of convergence clubs among the world’s wealthiest countries, though even within this set of countries, the likelihood of finding convergence among randomly chosen countries is lower than the likelihood of finding divergence. Where the preponderance of convergence clubs turns out to be the highest is actually among the world’s very poorest countries. The nature of convergence at the top and bottom ends of the income spectrum also differs: catch-up at the top and downward convergence at the bottom