Which of the following correctly and fully defines conditional convergence? Conditional convergence refers to the tendency for
A) poorer countries to grow faster than richer countries, but only if they receive sufficient foreign direct investment so that their steady-state capital stocks converge.
B) richer countries to grow faster than poorer countries given similar steady-state capital stocks.
C) poorer countries to grow faster than richer countries given similar steady-state capital stocks.
D) countries with similar steady-state levels of output to grow faster when they're poor than when they're rich until their per capita GDP levels converge.

Question

Quizplus · Accepted Answer

Conditional convergence is the tendency for countries with similar steady-state levels of output to grow faster when they're poor than when they're rich until their per capita GDP levels converge. This means that countries with lower initial levels of GDP per capita will grow faster than countries with higher initial levels of GDP per capita, but only up to a point where they converge at similar levels of GDP per capita. This is conditional on having similar steady-state levels of output.

Which of the Following Correctly and Fully Defines Conditional Convergence