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Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The Balkan countries undergoing the transition must advance their economies to be more competitive. The aim of this paper is to analyse economic growth with a primary focus on the analysis of economic convergence in the Balkan region in the period of 1997-2020. The research analyses the following Balkan economies: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Romania, Serbia, and Slovenia. This study applies Gross Domestic Product (GDP) as a measure of economic growth and is based on the neoclassical economic growth model: the Solow's convergence concept. The results show that the Balkan countries experienced economic convergence with a speed of 1.82% in the cross-sectional model and 7.87% in the panel data model. It means that the initially less developed economies noted higher economic growth than those richer. [ABSTRACT FROM AUTHOR]

This paper estimates the impact of public investment on regional economic growth and convergence at the NUTS 3 level in Greece. Using a new database of public expenditure per region for the period 1978-2007, it proposes a model which captures not just the impact of public investment in Greek prefectures, but also the spillover effects related to the existence of externalities from neighbouring regions. The results point to a positive long-run impact of public investment per capita on regional economic growth - but not on convergence - which also generates considerable spillover effects. However, the returns vary according to different types of public investment, with education and infrastructure spillovers having the highest impact. In general, public investment externalities seem to be more relevant for regional growth than direct public investment in each region. Finally, the impact of different types of public investment in Greece is mediated by politics and political factors, but the effect of politics disappears once we control for political-period-specific spatial-invariant variables. Resumen Este artículo estima el impacto de la inversión pública en el crecimiento económico regional y la convergencia a nivel NUTS 3 en Grecia. Haciendo uso de una nueva base de datos de gasto público por región para el periodo 1978-2007, se propone un modelo que identifica no solamente el impacto de la inversión pública en las prefecturas griegas, sino también los efectos de spillover relacionados con la existencia de externalidades procedentes de regiones vecinas. Los resultados apuntan a un impacto positivo a largo plazo de la inversión pública per cápita en el crecimiento económico regional - pero no en la convergencia - el cual genera unos efectos de spillover considerables. Sin embargo, los retornos varían de acuerdo con los diferentes tipos de inversión pública, siendo la educación y los spillovers de infraestructura los de mayor impacto. En general, las externalidades de inversión pública parecen tener una mayor relevancia para el crecimiento regional que la inversión pública directa en cada región. Para terminar, el impacto de los diferentes tipos de inversión pública en Grecia se ve influido por sus políticas y otros factores políticos, pero el efecto de las políticas desaparece una vez que se controlan las variables espacialmente-invariantes de tipo político ligadas a un periodo específico. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Economía (Universidad Autónoma de Yucatán) is the property of Universidad Autonoma de Yucatan, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of the paper is to analyze economic convergence of the Western Balkan countries towards the European Union member states with two types of measurement methodology, sigma and beta convergence. Sigma convergence measures the dispersion of real per capita GDP among the countries and beta convergence is based on the neoclassical growth theory. The main hypothesis of the paper is that the recent financial crisis has negatively affected the convergence process of the Western Balkan countries towards the twenty-eight member states of the European Union (EU-28). The relationship between selected macroeconomic variables and the rate of per capita GDP growth are econometrically tested. Sigma and beta convergence are estimated for the period 2004-2013 and two sub-periods: 2004-2008 and 2009-2013. The empirical findings support the hypothesis of economic convergence. The negative effects of the crisis on per capita GDP growth are confirmed, resulting in a slower convergence process. Dissimilarities between the growth patterns of the analyzed groups show the considerable heterogeneity of growth, i.e. the convergence clubs. [ABSTRACT FROM AUTHOR]

Research background: The processes of economic convergence observed in many developing countries are characterized by reduction of economic differences on the cross-country level, which are accompanied by growing internal economic inequalities. This may stem from the fact that in the catching-up countries, a more dynamic growth pattern is observed in the economically strongest regions, which is initially reflected in spatial polarization and increasing regional inequalities. However, just as the countries reach higher levels of development, the diffusion of growth-inducing impulses to less-developed areas should lead to the spatial equalizing of the development levels and reducing regional inequalities. Purpose of the article: The aim of the paper is to determine the relationship between the level of economic growth and observed economic inequalities in Central and Eastern European (CEE) countries. The theoretical framework adopted to describe and explain those relations is the so-called Williamson's hypothesis in which the relationship between the scale of regional inequalities and economic growth is illustrated by a curve shaped like an inverted U. Methods: The research procedure was intended to verify Williamson's hypothesis by estimating parabolic econometric models. Indicators of economic growth along with measure of regional inequalities (Williamson's coefficient of variation) were used in the regression modeling. The research period spanned the years 1995-2014. Findings & Value added: In the light of the study of CEE countries, it was possible to observe both convergence symptoms as well as divergence tendencies. It can be thus stated that the analyzed CEE countries followed a similar path to the one observed earlier by Williamson in other developing countries. However, the analyses conducted by the authors at the national and regional levels of CEE countries were equivocal and did not fully support the theoretical assumptions of Williamson's hypothesis. [ABSTRACT FROM AUTHOR]

We test for economic convergence in GDP per capita and consumption per capita within two distinct sets of countries: those with significant (and plausibly exogenous) fossil fuel (FF) endowments and those without such endowments. Among countries with FF endowments, we find evidence of both absolute and conditional convergence across both macroeconomic dimensions, as indicated by standard β- and σ-convergence tests. By contrast, we do not find robust evidence of convergence among countries without FF endowments. This pattern—convergence among FF-endowed and non-convergence among non-endowed countries—is robust to changes in the sample period, controlling for potential resource curse effects, and is largely consistent across growth components. We discuss the implications for economic development and comment on its implications for global decarbonization policies. [ABSTRACT FROM AUTHOR]

With initial low levels of income per capita, a declining population and relatively modest economic growth rates, there are little prospects of diminishing the gap between Romania and the EU countries. Nevertheless, in the long term, convergence is expected. The question then arises, "What are the drivers and their likely potential to boost economic growth and the catching-up process?". This paper presents shortly the theoretical background of economic convergence and then focuses on the assessment of possible paths of Romania's convergence towards the EU. Based on the existing long-term macroeconomic projections and the assessment of the possible future developments of the drivers of economic growth, we have built three scenarios of economic convergence, highlighting the possible timespan of convergence. We have employed growth accounting methods to decompose output growth rate into production factors' contributions (capital and labour) and total factor productivity. [ABSTRACT FROM AUTHOR]

This paper reviews catch-up growth in various parts of the world, especially in the twentieth century, with a particular focus on what this implies for the Global South. In 1950, US per capita national income, adjusted for purchasing power, was nearly five times the world average. Since then, Western Europe and Japan have closed their per capita income gaps with the USA. East Asia, South Asia and some other developing countries have also started to close their gaps with the West in recent decades. Thus, after well over a century of growing international economic disparities or divergence, the world has witnessed an era of uneven catching up with the North in parts of the South since the mid-twentieth century. [ABSTRACT FROM AUTHOR]

Theoretical background: The concept of the economic convergence process is one of the conclusions of neoclassical growth models, especially the Solow–Swan model. According to it, it is possible to catch up with countries with a lower level of economic development to the economic level of developed countries and to finally equalize the economies of countries. However, endogenous economic theories have indicated that economic convergence is not the only realistic scenario of economic development in the modern economy. Purpose of the article: The aim of the research is to determine the degree of beta and sigma economic convergence of the countries of Central and Eastern Europe to the EU-12 in the years 2004–2021. Research methods: Descriptive statistics and regression analysis were used in the research. The regression analysis was based on a beta and sigma convergence study. The first one was aimed at checking whether less developed countries are characterized by a faster rate of economic growth than more developed states, while sigma convergence made it possible to check whether dispersion in the level of socio-economic development in selected countries was levelled in the years 2004–2021. Main findings: According to the results of the research, it is possible to confirm the existence of beta convergence of the CEE countries compared to the EU-12 in terms of economic prosperity, taking into account the average wealth of citizens (GDP per capita). The economic measure, which is key in the study of economic convergence, is the basis for stating that in the years 2004–2021, there was a process of convergence between the groups of the surveyed EU countries. On the other hand, no reduction in the economic differentiation of the countries studied was observed based on the sigma convergence study. [ABSTRACT FROM AUTHOR]

In the last years a central issue in regional economic growth debate is represented by the convergence problem. Many empirical economists have noticed that per-worker GDP of poor regions tend to converge to those of richer regions. However more recently it has been observed that the economic convergence might not be achieved if, in the empirical analysis, we consider the entire data set as one sample. The phenomenon should be analyzed considering regions as belonging to different sub-samples with quite similar economy. Many authors refer to this hypothesis as economic convergence clubs. The definition of these homogeneous groups represents a crucial issue in many regional economic growth studies. The aim of this paper is to propose a method for the identification of convergence clubs for the European regions at NUTS 2 level. The econometric specification used is based on the classical, and spatial augmented version of the conditional β-convergence model. Two different optimization algorithms for the identification of convergence clubs are proposed and compared: Simulated Annealing and Iterated Conditional Modes. [ABSTRACT FROM AUTHOR]

Based on the theoretical framework of the Solow growth model, this paper employs a dynamic panel data approach to examine the impact of openness on growth and convergence in labor productivity in the Chinese provinces during the period 1984-2008. The study finds that regional openness has a significantly positive effect on regional growth in labor productivity in the Chinese provinces. When regional heterogeneity and regional openness are accounted for, the study finds fast conditional convergence in labor productivity across the Chinese provinces. As a byproduct, this study also estimates the structural parameters of the aggregate production function in the case of China. In sum, the major findings of this study lend strong support to the claim that openness promotes growth of labor productivity in China. [ABSTRACT FROM AUTHOR]

Schumpeterian growth theory stresses the role of structural change in long run growth. Countries which increase the share of technology-intensive sectors in their economic structures benefit more from technological learning and innovation. In addition, they are more able to respond to changes in the international markets and to compete in sectors whose demand grows at higher rates. The paper compares Brazil (and to a lesser extent the CIBS group of countries) from the point of view of the direction and intensity of structural change. It is suggested that structural change has been relatively weak in Brazil and that this has been associated with a less dynamic growth performance since the 1980s. [ABSTRACT FROM AUTHOR]

We compare a set of econometric studies that measure the effect of net internal migration in neoclassical models of long-run real income convergence and derive 67 comparable effect sizes. The precision-weighted estimate of beta convergence is about 2.7 per cent. An increase of one percentage point in the net migration rate of a region increases the per capita income growth rate in that region on average by about 0.1 percentage points. Introducing a net migration variable in a growth regression increases the estimate of beta convergence slightly. Studies that use panel models or IV estimation methods yield smaller coefficients of net migration in growth regressions, while the opposite holds for regressions controlling for high-skilled migration. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Latin American Studies is the property of Cambridge University Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of the present study is to design a bipolar model of economic growth with investment flows between two types of economies (conventionally referred to as relatively rich economies and relatively poor economies). Therefore in the following considerations it is assumed that the process of capital accumulation depends on investments undertaken in the economy. At the same time the Solow growth model takes into account only investments financed by domestic savings, whereas in the bipolar growth model also the investment flows between rich and poor economies are considered. It is assumed that both relatively rich economies are investing in the relatively poor economies and the poor economies make investments in the rich economies. The paper analyses the long-term equilibrium of the growth model, both in terms of existence of steady states of the system of differential equations and in terms of the stability of a non-trivial steady state. What is more economic characteristics of the point of the long-term equilibrium of the model are examined, model parameters are calibrated and growth paths of basic macroeconomic variables in selected variants of numerical simulations are presented. [ABSTRACT FROM AUTHOR]

This paper introduces new data on state-level physical capital by sector and land in the farm sector for the states of the United States from 1840 to 2000. These data are incorporated into aggregate accounting exercises with the aim of comparing cross-state results to those found in cross-country samples. Our aggregate results agree closely with the cross-country literature: input accumulation accounts for most of output growth, between three-fifths and three-quarters, but variation in the growth of TFP accounts for about three-quarters of the variation in the growth rate of output per worker. In convergence accounting, convergence of log TFP accounts for about seventy percent of the observed convergence in log output per worker. [ABSTRACT FROM AUTHOR]

This paper analyzes the convergence hypothesis and the impact of social policy on the economic growth of the six largest countries in Latin America between 1980 and 2010. Results suggest that social public policies have positively influenced growth in these economies. Particularly, there are non-observed variables (fixed effects) that positively affect the economic growth in Venezuela and Chile; however, there are other non-observed variables that may be negatively affecting growth in Brazil and Mexico. Regarding the convergence hypothesis, results reveal that the speed of convergence diminishes as real income rises, implying that these countries might be converging to their stable states. [ABSTRACT FROM AUTHOR]

Development and growth are complex and tumultuous processes. Modern economic growth theories identify some key determinants of economic growth. However, the relative importance of the determinants remains unknown, and additional variables may help clarify the directions and dimensions of the interactions. The novel stream of literature on economic complexity goes beyond aggregate measures of productive inputs and considers instead a more granular and structural view of the productive possibilities of countries, i.e., their capabilities. Different endowments of capabilities are crucial ingredients in explaining differences in economic performances. In this paper we employ economic fitness, a measure of productive capabilities obtained through complex network techniques. Focusing on the combined roles of fitness and some more traditional drivers of growth—GDP per capita, capital intensity, employment ratio, life expectancy, human capital and total factor productivity—we build a bridge between economic growth theories and the economic complexity literature. Our findings show that fitness plays a crucial role in fostering economic growth and, when it is included in the analysis, can be either complementary to traditional drivers of growth or can completely overshadow them. Notably, for the most complex countries, which have the most diversified export baskets and the largest endowments of capabilities, fitness is complementary to the chosen growth determinants in enhancing economic growth. The empirical findings are in agreement with neoclassical and endogenous growth theories. By contrast, for countries with intermediate and low capability levels, fitness emerges as the key growth driver. This suggests that economic models should account for capabilities; in fact, describing the technological possibilities of countries solely in terms of their production functions may lead to a misinterpretation of the roles of factors. [ABSTRACT FROM AUTHOR]

This paper analyzes the hypothesis of regional convergence in Latin America through a non-linear growth model for the time period 1950-2010. The methodology combines three approaches: the threshold autoregressive model (tar), panel data unit root tests and calculating critical values with a bootstrapping simulation. The results of the tests applied to the per capita gross domestic product (gdp) of two groups of countries in Latin America (the wealthiest and then all nations in the region) suggest that the linear model is superior to the non-linear model and show no evidence of partial or absolute convergence. We did not identify a group of countries in the region with higher per capita income that would behave as a leading economy. Our results cast doubt on other studies conducted with linear tests that did find conditional convergence in some countries in the region. [ABSTRACT FROM AUTHOR]

In the context of EU enlargement there is no universal model which should offer a unique solution for diminishing the disparities in the development of a country. An approach only from the point of view of economic growth is not enough, so we extend the analysis towards the social development. Considering the level of GDP per capita and of HDI registered by EU states during 1995-2012, we test the hypothesis of real σ and β-convergence in terms of economic and social development. The estimated results indicate a tendency in reducing the divergence in both economic and social degree of development. A relatively strong process of real σ-convergence became evident while real β-convergence testing supports the hypothesis among EU countries, but the results indicate a slower process for HDI convergence compared with GDP per capita. [ABSTRACT FROM AUTHOR]

Based on Aghion et al. (), this article provides new insights regarding whether financial development can affect economic growth non-linearly by adopting the concept of threshold effects. The empirical approach adopted in this article allows for the finance-growth relationship to be piecewise linear with a set of indicators including access to finance acting as a regime-switching trigger. Using cross-country observations from 144 countries stretching from 1985 to 2009, strong evidence of threshold effects in finance-growth link is found. It is suggested that financial development in general, and access to finance in particular, is among the important forces contributing to cross-country (non)-convergences in growth rates. [ABSTRACT FROM AUTHOR]

The article focuses on the economic growth model suited for countries with high proportions of foreign workers. It mentions that growth experiences of countries consisting the Gulf Cooperation Council (GCC) are consistent with the low per capita growth and high overall growth predictions of the modified growth model. Moreover, the foreign supply of labor becomes more elastic along the transitional dynamics converges to zero.

This paper examines empirically whether and how regional integration leads to convergence and growth amongst developing countries. Using standard growth models for nearly 100 developing countries over 1970-2004 we cannot establish robust growth effects of regional integration as such at the aggregated level of analysis even after using alternative measures of regional integration. However, because we find that trade and FDI promote growth, and because regional integration tends to increase trade and FDI, regional integration still has a positive impact on growth in its members through the effects of increased trade and investment on growth. Further, country-specific growth diagnostics do suggest that regional integration can be a binding constraint to growth as "deep" regional approaches can help to address crucial rail, road, air and energy links amongst countries (e.g. in the East African Community). Our findings also suggest that initially high levels of regional income disparities will lead to greater decreases in disparities. Whilst the level of intra-regional trade and incomes do not explain changes in income disparities, the presence of a regional Development Finance Institutions (e.g. Central American or East African development banks) with a relatively high loan exposure to GDP ratio tends to reduce regional income disparities suggesting a useful role for deeper integration in achieving regional cohesion. A one percentage point increase in exposure by DFIs leads to a drop of σ of about one percentage point. Finally, while the macro economic literature on regional integration tends to highlight only limited expected effects of African regional integration itself, our work at the firm level in three African countries (Benin, Malawi and South Africa) is indicative of significant dynamic effects of regional integration through the effects on firm level productivity in Africa. We suggest that in the future, further growth analytical work is undertaken which combines the development of methods to examine the effects of regions and measurement of the various types of regional integration.JEL Classification: F15, F21, F43, O47 [ABSTRACT FROM AUTHOR]

We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill-intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries. [ABSTRACT FROM AUTHOR]

While Indonesia has been experiencing relatively considerable and stable economic growth in the last decades, the country is prone to income disparity across regions due to uneven distribution of population, natural resources and the persistent impacts of centralized development imposed by the New Order regime. This study examines the economic growth convergence in East Java, Indonesia, from 2010 to 2019 and explores the influence of government expenditure on education, health, and capital sector on the economic growth convergence. By considering spatial dependence across regions, the result shows no strong evidence of regional income convergence in East Java. Also, this research claims the presence of spillover effect of government expenditure on education and capital sector on regional income growth. Notably, higher government expenditure of the education sector in one region could stimulate higher economic growth of its neighboring regions. Conversely, higher government expenditure on the capital sector in one region may lower the economic growth of its surrounding regions. [ABSTRACT FROM AUTHOR]

This study explores the effects of patent protection in a research and development (R&D)‐based growth model with financial frictions. We find that whether stronger patent protection stimulates or stifles innovation depends on credit constraints faced by R&D entrepreneurs. When credit constraints are nonbinding (binding), strengthening patent protection stimulates (stifles) R&D. The overall effect of patent protection on innovation follows an inverted‐U pattern. By relaxing the credit constraints, financial development stimulates innovation. Furthermore, patent protection is more likely to have a positive effect on innovation under a higher level of financial development. We consider cross‐country panel regressions and find supportive evidence for this result. [ABSTRACT FROM AUTHOR]

This article seeks to determine some of the peculiarities of the economic growth in the countries from the Economic Community of West African States (ECOWAS). Thus, the study is based on the country approach and uses econometric regression tests. In fact, in the context of the determination of the real GDP per capita growth rate of the countries in this region during the period 1987-2014, the results obtained show that it is still weak and unstable. Moreover, the weak convergence that has only been observed beginning with 2008 feeds the hope that ECOWAS can truly improve its level of development despite the heterogeneous nature of the countries. In order to overcome these difficulties, improving the socio-economic performance through the growth rate of real GDP per capita represents, among others, a necessity in relation to economic policy decisions. [ABSTRACT FROM AUTHOR]

Objective: The objective of this article is to present the results of research on the economic growth and business environment of the European Union countries in the context of convergence processes. Additionally, the article presents the results of investigation on the impact of business environment on economic growth. Research Design & Methods: Methods applied in the study are analysis and synthesis of the literature on the subject, as well as quantitative tools: descriptive statistics and multivariate regression. The analysis includes 28 countries of the European Union in the years 2000-2016 for economic growth and 2010-2018 for business environment. Findings: Changes in the business environment across the European Union, as well as upward trends indicate a gradual approach of member economies in these areas. A quantitative analysis of the dependence of growth on business environment has also been confirmed. Implications & Recommendations: The results can be important for policy makers. Demonstrating a positive link between business environment and economic growth should be viewed as a guideline for reforms, changes and regulatory improvements. This elaboration can be treated as a preliminary study on interrelation between business environment and economic growth in the context of economic convergence. Further research on the influence of business environment on economic convergence within the European Union countries is highly recommended. Contribution & Value Added: The originality of this work lies in the connection of two different research problems: economic growth and business environment, as well as the study of links between these two areas. [ABSTRACT FROM AUTHOR]

This article deals with analysis of economic, social and ecological disparities of Ukrainian regions. Regional economic disparities are measured through the convergence concept and the article employs panel data analysis with fixed and random effects estimations. Our empirical results show the presence of economic convergence in Ukrainian regions. Initially it was found that poor regions do grow relatively faster than the rich. Moreover, the difference between poor and rich regions has been decreased 1.8 times during 1999 and 2010. In addition, it was found that the presence of ecological convergence in the Ukraine and initially ‘clean’ regions do increase pollution faster than initially ‘dirty’ regions. That is, Ukrainian regions were converging to some environmental steady state through the process of increasing pollution. Ukrainian regions were also experiencing health convergence with negative policy implications, since all regions do converge to some health levels through an increase in morbidity. The economic growth of Ukrainian regions was achieved through sacrificing environmental situations and increased morbidity. Therefore, there were no clear economic reasons to start interregional confrontation that has taken place in the Ukraine, since all regions were on the same track of development. [ABSTRACT FROM PUBLISHER]

Recent advances in the urban science make broad use of the notion of scaling. We focus here on the important scaling relationship between the gross metropolitan product (GMP) of a city and its population (pop). It has been demonstrated that GMP ∝ Y Ypopβ with β always greater than 1 and close to 1.2. This fundamental finding highlights a universal rule that holds across countries and cultures and might explain the very nature of cities. However, in an increasingly connected world, the hypothesis that the economy of a city solely depends on its population might be questionable. Using data for 248 cities in the European Union between 2005 and 2010, we found a double GMP/pop scaling regime. For West EU cities, β = 1 over the whole the period, while for post-communist cities β > 1 and increases from ∼1.2 to ∼1.4. The evolution of the scaling exponent describes the convergence of post-communist European cities to open and liberal economies. We propose a simple model of economic convergence in which, under stable political conditions, a linear GMP/pop scaling is expected for all cities. The results suggest that the GMP/pop super-linear scaling represents a phase of economic growth rather than a steady, universal urban feature. The results also suggest that relationships between cities are embedded in their political and economic context and cannot be neglected in explanations of cities, urbanization and urban economics. [ABSTRACT FROM AUTHOR]

Although the issue of convergence between the new member states of European Union is an extremely debated subject nowadays, disparities between countries continue to exist and in some cases even to accentuate. The interest in studying the main determinants responsible for differences between growth rates across countries is omnipresent within international policies. One of the main challenges for the new member states is to identify an optimal mix of policies that would ensure high growth rates on one hand and sustainable convergence on the other hand. In order to align to the general standards imposed by the European Union each country should fulfill a set of nominal and real convergence criteria. The main purpose of this article is to test the hypothesis whether these two types of criteria are interconnected with each other and if this proves to be valid what are the main channels involved. [ABSTRACT FROM AUTHOR]

We study a model where economic growth is fueled by public basic-research investment and the importation of leading technology from foreign countries. In each period, the government chooses the amount of basic research, balancing the costs and benefits of stimulating growth through both channels. We establish the existence of steady states and the long-run share of technologically advanced sectors in the economy. Then we explore how different degrees of openness affect long-term incentives to invest in basic research. Our main insight is that higher openness tends to encourage more investment in basic research, which, in turn, yields a larger share of leading sectors. If, however, there are prospects of importing major technology advances, highly open countries will reduce basic research as such imports become particularly valuable. [ABSTRACT FROM AUTHOR]

The recent literature on convergence has departed fromthe earlier literature by focusing on the shape of the productionfunction and the rate at which an economy converges to its ownsteady state. This article uses advances from the recent literatureto look back at the question that originally motivated the convergenceliterature: what will the distribution of per capita income looklike in the future? Several results are highlighted by the analysis,including the suggestion that there is little reason to expectthe United States to maintain its position as world leader interms of output per worker. [ABSTRACT FROM AUTHOR]