Principles of Macroeconomics / Unit 4 MAC 0322 short lesson, about 20 seconds
Why Convergence Is Not Guaranteed
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The idea
Rich economies keep moving. New technology shifts their production function upward, which offsets the diminishing returns that would otherwise let others catch up.
In practice
Ideas can be used again at almost no extra cost, so they show little sign of diminishing returns.
Where people slip
And adopting technology needs institutions that support it, which is why identical investment produces very different results in different countries.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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