The Classical Approach to Convergence Analysis

Xavier X. Sala-i-Martin

Economic Journal, Summer 1996


The concepts of -convergence, absolute -convergence and conditional -convergence are discussed in this paper. The concepts are applied to a variety of data sets that include a large cross-section of 110 countries, the sub-sample of OECD countries, the states within the United States, the prefectures of Japan, the regions within several European countries. Except for the large cross-section of countries, all data sets display strong evidence of -convergence and absolute -convergence. The cross-section of countries exhibits -divergence and conditional -convergence. The speed of conditional convergence, which is very similar across data sets, is close to two percent per year.

Key Words:

Convergence, Regional Economic Growth, Neoclassical Growth, Endogenous Growth.

JEL Classification:

O40, O41, O51, O52, O53.