Cross-country data do not support the hypothesis that poor countries grow more rapidly than rich countries. In other words, there is no evidence of absolute convergence in the sense that poor countries gradually catch up with rich countries. True, a low level of income indicates unexploited growth opportunities, and thus helps create favorable conditions for rapid economic growth, other things being the same. But other things are not the same. For example, poor countries typically send fewer kids to school and grow less rapidly as a result. When other things are held equal (this can be done through regression analysis), empirical evidence indicates that poor countries actually converge — slowly, yes, but still — on rich countries. This is known as conditional convergence, and does not contradict the absence of absolute convergence illustrated in the picture above.
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