Neoclassical International trade theory suggests that as trade increases, factor prices converge. Neoclassical growth theory also predicts that incomes will converge as economies move towards their steady state equilibrium. In this section, we consider the extent to which incomes have converged across the globe as trade has increased, and what factors might mitigate against convergence.
There are two aspects to global income convergence: Cross-country Convergence and within country convergence. (Describe these methodologies and how they are formed).
In this essay, you need to explain:
1)- Solow Swan theory
2)- Factor price equalization
3)- Indigenous growth theory
And mention what they said about the convergence, why it is happening..etc. Look at the literature. For example, why global income convergence slow down ? What regions have not converged as fast as others and why? What is regional and clubs convergence…
Then explain/ describe the 3 measures of convergence (be brief here maybe around 400 words):
These measure are:
1- Inter- country convergence: It has two types * Absolute Beta Convergence and *Conditional Beta Convergence.
2- International Inequality
3- World Income Inequality
Approximately:
• 200 Words for the introduction
• 800 Words for theory part
• 1600 Words for empirical evidence “focus on the findings” (i.e. results of the empirical tests of the theories relevant to the essay topic). DO NOT describe the methodology
• 400 Words for the Conclusion (summary of the findings).