Question

Briefly explain the theory of ‘Convergence relating to Economic Growth?’ How does Absolute Convergence differ from Conditional Convergence?

Answer 1

The theory of convergence of economic growth implies that per capita of poor nations of the world's will grow at faster rate than developed nations and they will eventually meet at the same place in future in terms of per capita.

Absolute convergence means that per capita will converge even if you take absolute values (the absolute value of -3 and 3 is 3) while conditional convergence means that developing economies will converge to developed ones while those economies with falling per capita will converge to the depressed economy.