Reading: William Nordhaus (1996): Do Real-Output and Real-Wage Measures Capture Reality?
Reading: Patrick O'Brien: European Economic Development: The Contribution of the Periphery

Reading: Lant Pritchett (1997): Divergence, Bigtime

Lant Pritchett (1997): Divergence, Bigtime

The main purpose of Pritchett is to document "divergence." There is one group of countries--broadly, the (extended) North Atlantic--in which growth rates have been substantial and have been inversely related to GDP per capita at the start of the long twentieth century around 1870. But other countries follow a different pattern: what are now called emerging-market economies even though they started with lower incomes than North Atlantic economies have grown more slowly, making their relative position today far worse than it was 140 years ago.

Five Questions:

Lant Pritchett (1997): Divergence, Bigtime, Journal of Economic Perspectives 111:3 (Summer), pp. 3-17

  1. What is Pritchetts argument that the world must have been more equal back in 1800 than it is today?
  2. What suggestions does Pritchett make for how we should understand the limits of "convergence" and the "convergence club" to the (extended) North Atlantic?
  3. The story today is different than the story Pritchett told two decades ago because of super-rapid growth in China ca. 1977-present, and rapid growth in India ca. 1990-present. If Pritchett were rewriting his article today, what changes would he have to make?
  4. What countries have joined the convergence club that is the (extended) North Atlantic? What countries have fallen out of it? Does Pritchett give any reasons for why?
  5. Does Pritchett give a reason--or even a guess--for the stability of North Atlantic growth rates since 1870?