Question

discuss the potential for Convergence

Answer 1

In economics the convergence (also termed to be the catch-up effect) refers to the hypothesis that poorer economies' per capita incomes are likely to grow at faster rates compared to the richer economies. It occurs due to the investments in physical and human capital, market forces, technological benefits, government policies, and even lucky events. The high-income countries will run into diminishing marginal returns on their investments into physical and human capital, and would require to continue to invent innovated technologies and it will provide the lower-income nations a chance for this convergent growth. Consequently, all economies eventually would converge in terms of per capita income.