Tests of the 'Convergence Hypothesis': Some Further Results

Daniel Cohen

No 1163, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper offers new tests of the `convergence hypothesis'. It first analyses the pattern of growth of measured inputs (human and physical capital conventionally measured by an inventory method) and shows that these tests sustain the hypothesis. On the other hand, when the pattern of growth of revealed inputs (physical capital and Solow residual) is analysed, one is led to reject the convergence theory. In order to understand what lies at the heart of this discrepancy, the paper shows that the poor countries failed to catch up with the rich countries not so much because they failed to raise their school enrolments (or the UN-conditional convergence of the stock of measured inputs would not hold), but because the law of motion of human capital embodies a `stock of knowledge' which they failed to raise adequately.

Keywords: Convergence; Growth; Human Capital; Physical Capital (search for similar items in EconPapers)
JEL-codes: O4 (search for similar items in EconPapers)
Date: 1995-04
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Tests of the "Convergence Hypothesis": Some Further Results (1996)
Working Paper: Tests of the "convergence hypothesis": some further results (1995)
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