HIST-1107EL Study Guide - Quiz Guide: Capital Accumulation, Chemical Industry, Industrial Mineral
5 Dec 2020
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Convergence hypothesis: under certain reasons, being behind gives a productivity laggard the ability to grow faster than the early leader. Countries in the productivity race differ only in their initial levels of productivity but are otherwise similar. In a laggard country, however, the tangible capital is likely to be technologically obsolete. Under the convergence hypothesis, we would expect that any national differences in productivity levels which might appear would be eliminated sooner or later, because of the growth advantages inherent in being behind. In actual experience, productivity differences among countries stem from both persistent and transient causes: Transient causes: natural or military disasters, or dysfunctional forms of economic organization and public policy that may have ruled in the past but have been reformed. From 1870 to 1950, american maintained and widened its sustained a leadership advantage over other countries in term of gdp per capita and labour productivity.
