IMF Working Papers

Growth, Interrupted: How Crises delay Global Convergence

By Patrick A. Imam, Jonathan R. W. Temple

June 13, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Patrick A. Imam, and Jonathan R. W. Temple "Growth, Interrupted: How Crises delay Global Convergence", IMF Working Papers 2025, 116 (2025), accessed July 19, 2025, https://doi.org/10.5089/9798229011297.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

During a major crisis, the transitional dynamics of conditional convergence are unlikely to apply. In this paper, we introduce a Markov chain approach which integrates the study of crises and convergence. We allow upwards and downwards mobility to change when a country enters a crisis regime. We find that conflict and debt crises help to explain the persistence of low relative income, and that the convergence process has changed over time. Faster global convergence in the early 2000s can be attributed partly to fewer and shorter crises, so the multiple shocks after 2020 are likely to have slowed income convergence.

Subject: Capital productivity, Currency crises, Financial crises, Income, National accounts, Production, Total factor productivity

Keywords: Capital productivity, Convergence, Convergence process, Crisis, Crisis regime, Currency crises, Development accounting, Economic growth, Global, IMF working paper 25/116, Income, Income convergence, Row state to column state, State definition, Total factor productivity

Publication Details

You May Also Be Interested In...

Oil Shocks and Labor Market Developments

July 18, 2025

Industrial Policies and Firm Performance: A Nuanced Relationship

July 18, 2025

The Business Environment and Productivity in Tanzania: Evidence from Firm Level Data

July 18, 2025

Assessing the Monetary Policy Implications of Changes in Owner-Occupied Housing Cost Measurement: Insights from ICEQMOD

July 18, 2025