Question

The convergence hypothesis says that:

differences in real GDP per capita do not have much effect on living standards in the long run.

differences in real GDP per capita among countries tend to narrow over time.

differences in real GDP per capita among countries tend to increase over time.

aggregate production functions in different countries will all be the same in the long run.

Answer 1

Convergence theory in economics which is also called catch up effect simply tells that in the long run whether the economy is developed or developing, the real GDP per capita will tend to grow faster in the developing or the the poor economy than the richer economy

and poorer economy will catchup and they will converge in the long run with the richer economy in terms of per capita income because developing country has a full potential to grow faster than a developed country due to more chance of employment ,technology, Infrastructures development etc