Based on the Mankiw, Romer, and Weil (1992) framework, conditional convergence holds when fertility, education, and government spending shares of GDP remain constant ?
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Answer: B. income per capita in poor countries grows faster than in rich countries
Explanation
Conditional convergence predicts poorer economies grow faster when fundamentals align. Controlling for structural determinants allows low-income countries to catch up. Per capita income growth rates outpace rich nations under constant conditions. Mankiw Romer and Weil expanded the Solow growth model with human capital. Conditional convergence contrasts with absolute convergence across diverse economies. Steady-state income levels depend on savings rates, population growth, and education.
Growth economics utilizes convergence frameworks to study international income disparities. Empirical tests of economic development frequently apply conditional convergence regressions. Policy reforms aim to accelerate growth by targeting fundamental structural determinants. Income per capita differs between poor and rich countries in steady states. Rich countries growing faster would contradict the core premise of convergence. Convergence depends on economic fundamentals rather than foreign aid allocations.
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