The great convergence

15 November 2007   |   Commentary   |   By Mark Thirlwell

Along with globalisation, the onset of sustained, rapid catch-up growth in the developing world is one of the most important forces shaping the world economy. This development can be described as a Great Convergence that is unwinding the consequences of a previous Great Divergence that divided the world into developed and developing economies. This short paper sets out the story of the Great Convergence and places it into the broad context of world economic history.

‘The onset of rapid catch-up growth in the developing world is an historic development with the potential to reshape the world economy in fundamental ways.’

                            The great convergence, p 1

Key Findings
Following the onset of the Industrial Revolution in Northern Europe, a huge gap in living standards opened up between those economies that enjoyed the fruits of sustained modern economic growth and those that got left behind.
Beginning around the turn of the millennium, developing economics opened up a substantial growth gap over developed economies, producing a degree of convergence in living standards between developed and developing economies. This is the start of a Great Convergence.
Just as the earlier divergence in economic performance between developed and developing economies went a long way towards shaping the nineteenth and twentieth centuries, so will the Great Convergence shape the current century.