Perform the following analysis to examine the income convergence for two groups of countries:

Argentina, Chile, Mexico, and Uruguay (from South America); and the Four Asian Dragons (Hong Kong, Taiwan, South Korea, and Singapore).

(a) Compute the annual growth rates for every ten years from 1956 to 2015. (Hint:

(Real GDP Per Capitat, i

- Real GDP Per Capitat+9, i)/Real GDP Per Capitat, i, where t represents years and i represents different countries. Annual growth rate =

Growth rate/10 years.) Based on initial real GDP per capita in 1956 and the annual growth rates, do you think that real GDP per capita of these two groups of countries are likely to converge?

(b) Calculate the ratios of real GDP per capita for any one country from the Four Asian Dragons and any one country from South America to U.S. real GDP per capita from 1956 to 2015 and then plot the trends. Discuss the income gap between the United States and the other countries.