This paper talks about the convergence phenomenon, which implies that poorer economies per capita incomes and GDP tend to grow at faster rates than richer economies. The rate of convergence highly depends on the initial condition of the economy as well the growth potential of the economy…
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This paper offers a comprehensive analysis of the concept of macroeconomic convergence, and outlines empirical facts, that confirm this hypothesis. Macroeconomic convergence is a process adopted by the adjoining economies across regions for economic integration amidst themselves. The trade and growth models are two models depicting economic integration and are related to convergence of income. Macroeconomic convergence could be reached more rapidly when there is an equitable distribution of wealth .
Some of the most vigorous of all attempts towards macroeconomic convergence is noted among the African economies which are pestered by poverty. These nations have realized the importance of macroeconomic convergence to make their meek presences felt and to ensure monetary, financial and political stability as well as security
There are two kinds of macroeconomic convergence. Sigma-convergence signifies the rate at which the disparity in the income levels of nations is reducing, beta-convergence implies the rate at which the poorer nations are growing compared to their richer counterparts
Macroeconomic convergence could be brought about by drawing integration between the macroeconomic policies of the underlying nations. The nations might take an initiative to characterize themselves with similar economic features so as to lend themselves on comparative grounds with their neighbours
The concept of convergence is found to be popular among the poorer nations of the world whose primary aim is to raise their respective per capita incomes.
Economic growth and macroeconomic convergence: an empirical investigation Integration of national as well as regional economies with world economy is the salient feature over many years. Two models of economic integration which relates to income convergence are firstly growth models and secondly trade models (Kim, 1997, p.4). According to the neoclassical Solow model of growth, the regional level of income varies due to the different capital labour ratios. Whereas the Hecksher Ohlin trade model says that the income varies across the regions due to the difference in the factor prices and factor endowments (Kim, 1997, p.5). Income convergence occurs due to trades in goods and economic integration via equalisation in prices. Factor endowments vary across the regions and therefore various regions specialise in different industries. The growth models generated by Romer and Lucas, which are based on increasing returns on physical capital, states the chances of such income divergence. Even the trade models by Krugman states that income divergence may arise due to the differences in the industrial structures. If the industries equipped with high technology and high wages are subjected to external economy then the trade transactions
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(“Macroeconomic convergence, development and growth Essay”, n.d.)
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(Macroeconomic Convergence, Development and Growth Essay)
“Macroeconomic Convergence, Development and Growth Essay”, n.d. https://studentshare.org/macro-microeconomics/1391337-macroeconomic-convergence-development-and-growth.
The process in which the per capita income of the poor economies tends to grow as fast as that of the rich economies is defined as the convergence. The process eventually leads the per capita incomes to converge. As the developing countries have the advantage of diminishing returns to factors, they can converge faster than the developed economies (Alfaro et al, 2005).
Broadly, this empirical study focussed on the subject of financial development and economic growth. In specific terms, the study will seek to explore the relationship between monetary policies and real estate development. Further, the study will narrow down on the impact of interest rates on the value of residential properties in the Czech Republic (Arner, 2007, p.
This paper addresses the major growth processes in two-year old infants. It provides a summary of Berger’s The Developing Person through the Lifespan chapters five, six, and seven. The summary to chapter five highlights the physical growth of infants. This includes the acquisition of different motor skills and other biosocial development processes.
erve Bank of Australia (RBA) was established in the year 1959. The creation was put into place by the reserve bank act 1959. The act lays down the roles of these bank a puts it that this is not a profit acquisition bank. The bank introduction has seen many improvements in the economy of Australian.
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"Convergence is predicted to have a massive financial impact on TMT industries, over the next five years. Based on industry analysts' outlooks, between 2005 and the end of the decade, TMT practices of DTT member firms forecast the generation of at least a trillion dollars revenue from emerging convergence products as well as services.
What explains the divergence And perhaps equally important, what conditions either lead to further divergences or produce convergence North (1990, pp. 6-7).
In the context of the present paper, the above questions have two implications. First, what macroeconomic policy-mix is conducive to economic growth Second, why do governments of some countries adopt the optimal policy mix and the others do not There has been extensive research into the first question with regard to open developing economies (see for example, Little et al., 1993; World Bank, 1987).
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Introducing the annual progress report
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