Beyond β, σ and clubs: A unified approach to measure economic convergence

The study of convergence examines whether lagging economies are catching up with high-income economies. However, as the growth literature has recently pointed out the approach must be done by considering multi-country models. There are theoretical and empirical models that have attempted to overcome the weakness of a uni-country model. However, despite some recent advances, a full reconciliation between this new theoretical approach and the empirical methodology for measuring cross-country convergence has not yet been achieved. In this paper, drawing on complexity and graph theory, I propose a novel method that bridges the gap between convergence theory and its empirical measurement within a unified framework. This approach enables a more comprehensive assessment of both country-level convergence and the convergence of the global economic system. When estimating a convergence model with this methodology we observe: a) there is convergence between countries b) there is convergence in the global system in the period (1960-2019) but with a decreasing trend c) the graph allows us to identify between two and five groups of countries. This reflects the trend towards multipolarity in the globalized world.