Did globalization drive convergence? Identifying cross-country growth regimes in the long run

This paper is the first to apply a finite mixture model to a sample of 64 nations to endogenously analyze the cross-country growth behavior over the period 1870–2003. Results show that growth patterns were segmented in two worldwide regimes, the one characterized by convergence in per capita income, and the other by divergence. Interestingly, when three historical epochs are distinctly analyzed, in order to investigate the empirical link between globalization and convergence, the dynamics which dominated over the whole period seem to have emerged only during the post-1950 years. In contrast, the First Global Wave was marked by persistent heterogeneities.