On the convergence - divergence debate -

Abstract

Since the 1950s economists have been attempting to answer the following question: will there be a time at which poor countries are going to match rich countries in terms of per-capita income levels? Until today, there has been no unanimous answer to this question. This thesis' main focus is to extend one of the major papers contributing to the empirics of per-capita income convergence, that of Mankiw, Romer and Weil (MRW) of 1992. We shall alter the explanatory variables, time-period and econometric approach used by MRW, with the aim of identifying whether any of these, if any, is driving MRW’s result of conditional convergence.