Convergence in recent growth theories: a survey

This paper reviews one of the crucial issues in the recent growth literature concerning the hypothesis of cross country convergence of levels and growth rates of income per capita implied by the neo‐classical growth model, both in the Solow‐Swan and Rampsey‐Cass‐Koopmans versions. The alternative endogenous growth models, consistent with permanent income inequality, are considered. Convergence to a common income level versus divergence is discussed from a theoretical point of view. Then, empirical tests of the convergence property are presented. What emerges is that Barro type regressions and their findings about “conditional” convergence are questionable and cannot be used to give a definitive response on this issue.