Why economic convergence matters in today’s globalized world
In his fine book The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization , professor Thomas Homer-Dixon refers to the projected divergence in average income per capita between the rich and poor countries. Even if one assumes that the low income countries grow for the foreseeable future at much higher rates than the high income countries, because the current gap in per capita income is so large, the gap widens for many decades to come before convergence finally sets in well into the next century, if not later. In other words, by 2015 the rich countries are so far ahead of the rest of the world that, except for a handful of countries with incomes very close to the income of the poorest rich country, no one else has a realistic chance of converging, as Taiwan (China) and South Korea did during the post-World War II period. This phenomenon, of widening income gaps in the future notwithstanding the presence of higher growth rates in the poor c...