Journal of Economic Perspectives: Vol. 11 No. 3 (Summer 1997)


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Divergence, Big Time

Article Citation

Pritchett, Lant. 1997. "Divergence, Big Time." Journal of Economic Perspectives, 11(3): 3-17.

DOI: 10.1257/jep.11.3.3


Historical data are unnecessary to demonstrate that perhaps the basic fact of modern economic history is massive absolute divergence in per capita income across countries. A plausible lower bound on per capita income can be combined with estimates of its current level in the poorer countries to place an upper bound on long-run income growth. Between 1870 and 1990, the ratio of richest to poorest countries' income increased from roughly 9 to 1 to 45 to 1, the standard deviation of (natural log) per capita income doubled, and the average income gap between the richest and all other countries grew nearly tenfold from $1,286 to $12,000.

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Pritchett, Lant (World Bank)

JEL Classifications

O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
N10: Economic History: Macroeconomics and Monetary Economics; Growth and Fluctuations: General, International, or Comparative


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