Sources of convergence in the late nineteenth century

Abstract

This paper investigates convergence for a group of seven countries during the period 1870–1914. A standard empirical growth model which includes physical and human capital accumulation proves unsatisfactory in this setting. An alternative neoclassical open-economy factor accumulation model is proposed, which admits capital and labor migration, and may be extended to include a moving frontier. The model explains the observed convergence pattern in the sample and suggests that factor accumulation patterns were the prime sources of labor productivity convergence from 1870 to 1914.