Global Convergence in Economic and Social Structure

The macroeconomic structure of the modern world-economy has been incredibly stable over time.  According to data from Maddison, the 188-year correlation of national income levels for the 8 major world regions is a remarkable r = 0.956.  There has been virtually no change in relative incomes for at least two centuries.  This structural stability contradicts both standard neoclassical convergence models and standard world-system mobility models.  Nonetheless, structural convergence is occurring: convergence in the demographic, distributional, governmental, industrial, and other internal structures of countries around the world.  These trends presumably create pressure for macroeconomic convergence, but monte carlo simulations suggest that any resulting macroeconomic convergence is likely to be very slow indeed.  It is also likely to be very different in character from standard "catch up" models that presume convergence to US/EU standards of living.  This presentation focuses on the macrotrends of global convergence, with particular attention to the four "BRIC" countries (Brazil, Russia, India, China) and the "Four Tiger" economies of east Asia (Hong Kong, Korea, Singapore, Taiwan).  The macroeconomic trajectories of the BRICs since 1980 can all be seen as disparate cases of evolution toward equilibrium: stagnation for Brazil, convergence down for Russia, and convergence up for India and China.  All four countries will soon have near-identical demographic profiles and near-identical macroeconomic characteristics (except India, which is at a much earlier point in the curve than the others).  The lead cities of the BRICs are also coming to closely resemble those of the Tigers (again with the exception of India).  The interesting feature of all these countries is that the equilibrium point to which they are converging is not one best represented by the US or the EU, but one best represented by Brazil and the other large countries of Latin America.