Over time, both productivity and the GDP per capita have increased in industrialized countries. Interestingly, the productivity and the GDP per capita of these nations have approached one another over time. This convergence signifies that all industrialized nations are approaching a common level of prosperity. Why does this phenomenon occur? Nobody has a complete answer to this question. The most common explanation for convergence is the constantly increasing speed at which new technologies spread across international borders. Remember that one of the keys to increased productivity is technological improvement. When industrialized nations share technological advances (rather than forcing each country to make them independently), productivity for each country will tend to move towards a level dictated by the performance of modern production technology. Does this apply to all countries?
This is the end of the preview. Sign up
access the rest of the document.