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. 558

b. Graph the data from part a in the figure below. Does this look like Figure 26.11’s story about the OECD countries, or is it quite different?

Transcribed Image Text:

GDP per capita in 1880 Annual growth rate, 1880-2000 West: $8,500 1.6% East: $6,300 1.7% Midwest: $4,700 2.2% South: $2,800 1.2%