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Keywords:

  • convergence;
  • aggregate productivity;
  • technological capabilities;
  • Latin America;
  • development accounting;
  • social infrastructure

Abstract

The paper analyses the convergence hypothesis in Latin America during 1960–2005. The evidence is not favourable to clear convergence or divergence trends and suggests the existence of transitory clubs of convergence. After 1990–1994, the lower income economies showed convergence to the richer countries but in a context of increasing dispersion of the per capita income. The development accounting and the decomposition of the total factor productivity indicate that those results are mainly explained by relative differences in technological capabilities. These are determined by structural and political factors. The efforts to integrate the economies were not enough to reduce the gap. Copyright © 2011 John Wiley & Sons, Ltd.