Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Divergence, Big Time
Journal of Economic Perspectives
vol. 11,
no. 3, Summer 1997
(pp. 3–17)
(Complimentary)
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.Citation
Pritchett, Lant. 1997. "Divergence, Big Time." Journal of Economic Perspectives, 11 (3): 3–17. DOI: 10.1257/jep.11.3.3JEL Classification
- O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- N10 Economic History: Macroeconomics and Monetary Economics; Growth and Fluctuations: General, International, or Comparative
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