A key economic issue is whether poor countries or regions tend to grow faster than rich ones: are there automatic forces that lead to convergence over time in levels of per capita income and product? The purpose of this project is to analyze this question in three contexts. First, personal income across the U.S. states from 1840 to the present; second, gross domestic product for over 70 regions of 6 European countries from 1950 to 1985; and third, national-account and other variables for about 100 counties from 1960 to 1985. A theoretical framework will be developed which is based on extensions of the neoclassical growth model. From the perspective of these extensions, recent theories sort into three categories: replacing exogenous technological progress by theories of technological change; replacing exogenous population growth by theories of fertility; and replacing the usual assumption of diminishing returns of capital by the assumption of asymptotically constant returns. These growth theory models will then be tested with data corresponding to the U.S., European, and international contexts. This research is important because it will provide a better understanding of the factors determining economic growth and development.
