Convergence of Income: A Review of the Literature

Abstract

In growth theory and development economics income convergence is an important issue. There have been diverse methodologies and thoughts on Income convergence on the global front. This paper reviews the literature on convergence, highlighting the evolution of economic thought and discussing diverse factors influencing the income convergence process. It also highlights the challenges and limitations associated with the approaches used in research done so far. The paper is divided into four sections. The first section highlights the evolution of economic thought on income convergence. The second section reviews existing literature on income convergence1991 onwards. The third section identifies the challenges and limitations of research done during the above period. The paper concludes that there is the presence of both absolute and conditional convergence, as well as divergence in certain cases.