Key Terms

converging economy

economy of a country that has demonstrated the ability to catch up to the technology leaders by investing in both physical and human capital

East Asian Tigers

the economies of Taiwan, Singapore, Hong Kong, and South Korea, which maintained high growth rates and rapid export-led industrialization between the early 1960s and 1990 allowing them to converge with the technological leaders in high-income countries

growth consensus

a series of studies that show, statistically, that 70% of the differences in income per person across the world is explained by differences in physical capital (savings/investment)

high-income country

nation with a per capita income of $12,475 or more; typically has high levels of human and physical capital

low-income country

a nation that has a per capita income of less than $1,025; a third of the world’s population

middle-income country

a nation with per capita income between $1,025 and $12, 475 and that has shown some ability, even if not always sustained, to catch up to the technology leaders in high-income countries