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  • Thumbnail for Sector Growth and Convergence in Aggregate Agriculture, Manufacturing, and Services
    Sector Growth and Convergence in Aggregate Agriculture, Manufacturing, and Services by Crosby, Sumner M., IV

    Currently the richest countries of the world sustain an income almost seventy times that of the poorest ones. Recent literature, such as Eichengreen and Gupta (2009) and Rodrik (2012), suggest that productivity is an important determinant of growth and may explain why some nations are not catching up in the long-run, especially at the sector level. The topic of sectoral value convergence, however, has not been an area of much study. Using time series data on between 56 to 111 economies, this paper finds that absolute convergence occurred only in the manufacturing and services sectors from 1980 to 2010. When conditioned upon human capital, political infrastructure, and a number of sector specific determinants, convergence occurred across countries in agriculture, manufacturing, and services. In addition, increases in human capital are found to improve convergence effects in all three sectors.