Econ 135 :: F2021 :: Problem Set 5.1.5. Failing to “Converge” or Catch Up to America (& þe Rest of þe Global North)

History of Economic Growth course "convergence" python exercise...

These notebook assignments are a required part of the course.

Collaborating on the notebooks is more than okay—it is encouraged! Seek help from a classmate or an instructor or a roommate or a passerby when you get stuck! (Explaining things is beneficial, too—the best way to solidify your knowledge of a subject is to explain it.) 

But the work should be your own.

No cutting-&-pasting from others’ notebooks, please! We want you to learn this stuff, and your fingers typing every keystroke is an important way of building muscle memory here.

In this notebook, you will attempt to assess to what degree countries that were well-positioned, economically, poiltically, culturally, educationally, and technologically, to “converge” to the standards of living and productivity levels of the United States in 1870 have done so—or, rather, had done so as of 1979.

Neoclassical and neoliberal economists believe they have a strong theoretical argument that there should be “convergence” of economies. The first, less important, part is that economies should converge in their savings-investment rates and in their population and labor force growth rates and thus in their capital intensity levels. More important—so the theoretical argument goes—is convergence in the level of technology deployed. Development is easier than discovery, and deployment is easier than development. Discovery must take place, overwhelmingly, in the leading edge growth poles of the world economy. But development can take place in any of a wide range of places with sufficiently developed communities of engineering practice. And deployment can take place anywhere that people are literate, experienced with the use of modern technology, and confident that their effort at deploying technologies in production will be satisfactorily rewarded. Once, therefore, countries’ economies have developed sufficient degrees of literacy and sufficiently strong communities of engineering practice to begin to transfer technology from abroad and deploy it in their economies—once they have made what Walt Rostow used to analogize as the “takeoff” into self-sustained growth, “convergence” should follow. That, at any event, is the theory.

Back in 1986 Will BaumolProductivity, Convergence, & Welfare: What Does the Long-Run Data Show? <> argued that the history since 1870 showed that this had in fact happened.

I disagreed.

Was I right?

Let us get started!

Do the Notebook on Binder: <>
See the file on Github: <>
Do the Notebook on Berkeley DataHub: <>

Note: Answers: <>


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