Which of the following is a characteristic of the 'Catch-up' or 'Convergence' hypothesis in growth theory?
A. Only absolute convergence always holds unconditionally
B. There is no tendency for convergence
C. Richer economies always grow faster
D. Poorer economies tend to grow faster than richer ones, conditional on similar steady-state determinants
Answer: Option D
Solution (By JKSSB Mock Tests)
Conditional convergence predicts that countries with lower initial income per worker grow faster once differences in saving rates, population growth and technology are controlled for.
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