July 10, 2016

Convergence: A marathon, not a sprint

Vivek Dehejia, Senior Resident Fellow at IDFC Institute, analyzes the reasons for a drop in the convergence between GDPs of emerging and advanced economies in this Mint article.


"Have emerging economies stopped catching up with advanced economies, measured in terms of gross domestic product (GDP) per capita? The World Bank’s most recent Global Economic Prospects report, published in June, suggests that this worrying scenario may now be a reality...The World Bank’s research suggests that this year, for the first time since the start of the new millennium, 47%—or less than half—of the 114 emerging and developing economies studied will be poised to converge in terms of GDP per capita with the US and other advanced economies. That ratio was at a high point of 83% on track for convergence at the onset of the global financial crisis in 2007... Meanwhile, another way to slice the same data is to observe that the average time it is expected to take emerging economies to converge to advanced economies has increased...It should also be noted that slower convergence in income per person between emerging and advanced economies also has knock-on effects on global inequality and poverty."


Read the full article here.

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