According to economists Robert Barro and Xavier Sala-i-Martin, convergence isn€™t just for entire nations: It€™s also true for states and regions, as well. They looked at state-level GDP per capita in the United States in 1880, and then calculated how fast each state grew over the next 120 years. They found that convergence held almost exactly.
a. With this in mind, draw arrows to connect the GDP per capita data on the left with the long-term growth rates on the right.

b. Graph the data from part a in the figure. Does this look like Figure 28.9€™s story about the OECD countries, or is it quite different?

Barro and Sala-i-Martin also found that convergence also held almost exactly for regions of Japan: The areas that were poorest in 1930 grew fastest over the next 70 years. Thus, it is difficult to find major evidence in favor of the commonsense idea that €œthe poor areas grow poorer.€

Transcribed Image Text:

GDP per Capita in 1880 West: $8,500 East: $6,300 Midwest: $4,700 South: $2,800 Annual Growth Rate, 1880-2000 1.2% 1.6% 1.7% 2.2% Growth rate, 1880-2000 2.5 2.0 1.0 0.5 一 2,500 5,000 7,500 10,000 GDP per capita, 1880