Do we have any pro on this subject who could explain it please?
Thanks
Club convergence occurs when a poor country (PC) adopts INSTITUTIONAL reforms. This will lead to convergence to rich country (RC) gdp levels over time. Think of it as you have to join the club (build up institutions) for convergence to occur.
Conditional convergence occurs when certain conditions are met. The PC needs to have the same population growth, prodcution function as the RC for them to conditional converge.
Absolute Convergence says that convergence will happen just because. The theory is that PCs have access to the same technology as RCs and can adopt this to advance their economy.
I’m guessing this question came from the CFAI AM Mock exam? That question confused me as well…
I also think that the neo classical model implies convergence, since capital will move to where it gains better returns, where the endogenous model makes so assumption about it.