Answer to Question #283743 in Macroeconomics for ABEX

Question

35. The theory of convergence is not addressed in the Romer’s model of endogenous growth as the model is relevant to developed countries. What is the avenue by which the theory of convergence can be maintained in such endogenous growth models? What are the determinants of this avenue?

Answer 1

The avenue by which the theory of convergence can be maintained in such endogenous growth models in the sense that.

According to convergence theory, when countries progress from early industrialization to full industrialization, they begin to resemble other industrialized civilizations in terms of societal norms and technology.

In these circumstances, convergence theory predicts that developing countries' economy will grow faster than those of developed countries. As a result, everyone should eventually be on an equal footing.

The determinants are technology change and general output measure relation to increase in technology.