The Bank for International Settlements (BIS) has published a working paper finding that the stronger tendency for poorer countries to grow faster than richer ones survives methodological objections to earlier research. The evidence points to an abrupt shift in 2003–2013 rather than a gradual erosion of richer countries’ growth advantage. However, it does not establish how quickly individual countries close gaps to their own evolving income targets.
The analysis covers 164 countries across six decade windows spanning 1963–2023. The shift remains when China, resource exporters, transition economies or East Asia are excluded, while simulations of the estimation biases examined do not reproduce the observed decline. Convergence weakened in 2013–2023 but remained statistically significant in the paper’s model. This finding concerns the relationship between income levels and subsequent growth, not a demonstrated narrowing of income dispersion across countries. Income dispersion remained wider in 2023 than in 1963.
The uncertainty over individual countries’ adjustment speeds reflects estimation bias governed primarily by the calendar span of the data. Observing the same 60 years more frequently does not eliminate that bias. A separate calculation places a lower bound of 0.66% a year on adjustment toward countries’ own moving income targets, conditional on the assumption that unmeasured factors supporting long term income are more favorable in richer countries. The evidence therefore supports a change in the pattern of growth between countries without identifying a precise rate of adjustment within them.