Income distribution and convergence: the European experience, 1870-1992

Economic convergence has emerged as one of the key debates in the theoretical andhistorical literature over the last decade. Galor identified three forms of long run percapita income convergence: absolute convergence, whereby convergence occursindependently of the initial conditions facing each economy; conditional convergence,whereby convergence occurs among economies which have identical structuralcharacteristics, independently of their initial conditions; and club convergence,whereby convergence occurs only if the structural characteristics are identical andinitial conditions are also similar. Of these, the absolute convergence hypothesis hasbeen discredited whereas there is empirical support for both the conditionalconvergence and club convergence hypotheses. The club convergence hypothesis,in particular, has much to offer to economic historians. It stresses the importance ofboth the initial conditions facing each economy and the structural and institutionalfeatures of the economy (e.g. preferences, technologies, rates of population growth,government policies, etc.).[...]