A tendency for two or more economies to become increasingly similar. This may be, for example, in respect of per capita incomes. Real growth rates, inflation rates, interest rates, methods of economic organization, or social policies. In the context of economic growth, convergence implies that poorer countries converge in living standards with the richer countries owing to the tendency of the former to grow faster than the latter. Conditional convergence means that the countries may have different levels of per capita income in the long run, but after taking account of the determinants the long-run per capita income poorer countries tend to grow faster than richer countries. The concept of convergence clubs means that convergence may take place for some subsets of countries, e.g, a group of rich countries alone, or a group of mid-income developing countries. Convergence is predicted by a number of theoretical models of growth; the empirical evidence is ambiguous.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|