Club convergence vs. conditional convergence

Is the difference between these two that club convergence really marginalizes the “poor” while conditional convergence only talks about specific criteria like savings rates, population growth rates, and production functions?

bump. How do you guys understand the difference?

Econ is a sore subject on this forum man lol

LOL…fair enough.

I’m just going to try and answer my own question:

conditional convergence is basically a bunch of different countries with similar criteria are eventually going to grow the same rate. Club is basically there are two clubs. Club one: rich and middle income. These will converge together. While those in club two: the poor countries will diverge from the club one.

that’s my take fwiw.

Club convergence is having a set of criteria to match that “club” it could be many.

you are correct on conditional convergence.

thanks, that sounds a lot like conditional where a bunch of countries with similar criteria are going to converge…you could say that all those countries are a “club”, that’s why I think the difference is that club convergence talks about a rich & middle class club and a poor club. IMO

if i’m honest i have never really understood the difference between club and conditional. it is not very well explained in either CFAI or Schweser material.

Anyone know this topic well? I don’t understand the difference either

Go re-read the notes. That’s not what it is at all. It’s all about the characteristics of the country, and how they differ from proven characteristics of the OCED countries.

My understanding is that there are two types of convergence: absolute or conditional. To have conditional convergence, countries needs to meet criteria on the saving, population and production. Club divergence points out that convergence only occurs for countries part of the club. The factors in the club divergence are not exactly the same (ex. legal system or education matters for the club divergence).