Macroeconomic theory Miscellaneous Essay
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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).