International and inter-regional economic convergence debate: theoretical approaches and empirical evidence

Abstract

The discriminatory effects of globalization, in regard to countries, subnational regions and social groups, put new life into the debate over the convergence hypotesis, at the very base of the neoclassical growth theory. This paper offers an exhaustive revision of the empirical evidence regarding the convergence/divergence in per capita income level issue, both among countries as well as among subnational regions. It is concluded that after two a decades of convergence, in the sixties and seventies, from the eighties on there is a dominant trend towards polarization. This evolution seems to confirm the claims of endogenous growth theory and the New Economic Geography, in the sense that economic activity tends to agglomerate with a circular cause and effect logic, where it is already concentrated.