Divergence, Big Time

Lant Pritchett ()

Journal of Economic Perspectives, 1997, vol. 11, issue 3, pages 3-17

Abstract: Historical data are unnecessary to demonstrate that perhaps the basic fact of modern economic history is massive absolute divergence in per capita income across countries. A plausible lower bound on per capita income can be combined with estimates of its current level in the poorer countries to place an upper bound on long-run income growth. Between 1870 and 1990, the ratio of richest to poorest countries' income increased from roughly 9 to 1 to 45 to 1, the standard deviation of (natural log) per capita income doubled, and the average income gap between the richest and all other countries grew nearly tenfold from $1,286 to $12,000. Copyright 1997 by American Economic Association.

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Working Paper: Divergence, big time (1995)
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