In: Economics
3. One
1. Catching up to advanced capitalist countries,
2. Being caught up to by more rapidly growing countries, or
3. Still experiencing a big gap in living standards with no immediate prospects of catching up.
Briefly explain why the country you are a citizen of falls into the category you have chosen.
A. Production function analysis is when maximum amount of output can be attained from a given number of inputs. The convergence would occur because low-income countries would grow at a much faster rate, because of huge investments undertaken and physical and technological gains, while high income countries would grow at a slower rate because they have already reached that peak, now it is just a matter of sustenance.
B. Low income countries should have the necessary supportive economic infrastructure to get to that convergence. Society's performance is not guaranteed which generates discrepancy in the growth rate. Thus even if a country has the necessary technological gains, its human capital should concide with that rate of development in order for it to converge with the developed nations.
C. US is being caught up by more rapidly growing countries. As its growth rate is slowing down and other developed countries are growing exponentially.