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This paper provides empirical evidence that there is no convergence between the GDP per-capita of the developing countries since 1950. Relying upon recent econometric methodologies (non-stationary long-memory models, wavelet models and time-varying factor representation models), we show that the transition paths to long-run growth (the catch-up dynamics) are very persistent over time and non-stationary, thereby yielding a variety of potential steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates per-capita output divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per-capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence. [ABSTRACT FROM AUTHOR]

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Recent work suggests that financial development is important for economic growth, since financial markets more effectively allocate capital to firms with high value projects. For firms in poorly developed financial markets, implicit borrowing in the form of trade credit may provide an alternative source of funds. We show that industries with higher dependence on trade credit financing exhibit higher rates of growth in countries with weaker financial institutions. Furthermore, consistent with barriers to trade credit access among young firms, we show that most of the effect that we report comes from growth in the size of preexisting firms. [ABSTRACT FROM AUTHOR]

Taxing agriculture to mobilize resources for industrialization has been a widely used development strategy. Using novel cross-country time-series data sets with direct measures of agricultural taxation, we examine how a policy bias against agriculture affects the speed of convergence in income per capita, structural change, and economic growth. We find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth. Overall, we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long-term economic growth. [ABSTRACT FROM AUTHOR]

If society's goal is to increase people's feelings of well-being, economic growth in itself will not do the job. Full employment and a generous and comprehensive social safety net do increase happiness. Such policies are arguably affordable not only in higher income nations but also in countries that account for most of the population of the less-developed world. These conclusions are suggested by an analysis of a wide range of evidence on happiness in countries throughout the world. [ABSTRACT FROM AUTHOR]