Economic growth and economic development 33

10

Introduction to Modern Economic Growth

log gdp per capita
8

9

Western Offshoots

7

Western Europe

Latin
America

Asia

6

Africa

1000

1200

1400

1600

1800

2000

year

Figure 1.12. The evolution of average GDP per capita in Western
Offshoots, Western Europe, Latin America, Asia and Africa, 10002000.
1.5. Conditional Convergence
We have so far documented the large differences in income per capita across
nations, the slight divergence in economic fortunes over the postwar era and the
much larger divergence since the early 1800s. The analysis focused on the “unconditional” distribution of income per capita (or per worker). In particular, we looked at
whether the income gap between two countries increases or decreases irrespective of
these countries’ “characteristics” (e.g., institutions, policies, technology or even investments). Alternatively, we can look at the “conditional” distribution (e.g., Barro
and Sala-i-Martin, 1992). Here the question is whether the economic gap between
two countries that are similar in observable characteristics is becoming narrower or
wider over time. When we look at the conditional distribution of income per capita
across countries the picture that emerges is one of conditional convergence: in the
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