This paper attempts to:
- compare GDP per capita level and growth across 17 advanced countries over 1890-2013.
- compare the level and growth of the main components (TFP, capital intensity, working time, and employment rate) of GDP per capita in order to see how they contribute to the GDP per capita difference.
- test the convergence hypothesis of GDP per capita and its components over different sub-periods.
The second half of this paper focuses on convergence. This is the hypothesis that economies with lower per capita income will tend to grow faster than the ones with higher per capita income. There are mainly 3 types of convergence: absolute convergence, conditional convergence, and club convergence. One of the two approaches to convergence is sigma-convergence. It refers to the reduction of dispersion of levels of income across economies with time.
Through data presentation and analysis, it yields the following results:
- All countries have at least one huge growth in GDP per capita in the 20th century, but in a staggered manner.
- Almost all countries have faced a huge decline in GDP per capita growth.
- The GDP per capita leadership shifted over years.
- Overall convergence among advanced countries.
- GDP per capita convergence to the leadership position is not always happening.
- Employment rates and hours worked did not contribute to the overall convergence process.