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The changes in the significance of developing countries in the world economy during the period from 1950 to 2010 provide a sharp contrast when compared with the period from 1820 to 1950. In terms of both PPP and market exchange rates, after 1980, the share of developing countries in world output rose rapidly, divergence in per capita income stopped and a modest convergence began. This was attributable almost entirely to Asia, as Latin America witnessed neither, while Africa experienced a declining share and continuing divergence. During the 2000s, convergence was more discernible and broader based. The idea that latecomers to industrialization catch up with countries that are leaders, over time, exists in unconventional economic history and orthodox economic theory. But there is nothing automatic about convergence, or about growth. Convergence and divergence are often simultaneous. This is borne out by the experience of developing countries in the world economy since 1950.

This chapter addresses the question of whether Europe is really as poor as suggested by comparative data on real GDP per capita. It examines two classes of arguments implying that standard PPP-based ratios of European output per capita relative to that of the United States understate true European welfare. It demonstrates that even if the decline in European hours per capita represented a voluntary transfer of work hours to pure leisure, that leisure is not worth much. It reviews debates involving four leading interpretations of the relative decline in European hours per capita. It also considers possible dimensions in which measured PPP GDP overstates welfare in the United States compared to Europe.

This chapter begins with global and national political developments and explores how they led to changes in economic policies and institutions, as well as the consequences of these changes. Both world wars, as well as the Great Depression, had a significant negative impact on the economy. In addition, the transition from the empire to a new nation-state within new borders had long-lasting economic consequences. As a result, both total and per capita GDP fluctuated sharply during these decades. The chapter demonstrates how the decade of the Great Depression from 1929 to 1939 was characterized by protectionism, industrialization led by the state, and moderately high rates of growth.

It is widely recognized that in Japan before the Meiji Restoration there occurred a gradual increase in output. Examines whether or not the trend in real wages diverged from that of per capita output growth, and concludes that traditional Japan did not exhibit a drastic divergence between wage change and output growth as experienced in early modern

Western Europe. Also explores briefly the factors accounting for the differences between the two pre-modern growth processes.

Chapter 5 highlights the social stratification of individual transnationalism using an analysis of Eurobarometer survey data (2006, 2007). The findings show that individual transnationalism is by no means a mainstream phenomenon. Relatively few Europeans interact across borders on a regular basis, while the majority remain (predominantly) within the confines of their nation state. In all models, high education, high socio-economic status, age, and residence in urban and border areas are strong predictors of transnational behaviour. Results suggest profound differences among citizens from different member states. Subsequent analyses test the effect of a country’s degree of transnationalization, measured by the KOF index of globalization, as well as its economic prosperity, geographical position and population size. People from wealthier and more globalized countries are more transnational. Also, a country’s size is inversely related to the transnationalism of its citizens.

This chapter examines the cross-country and temporal patterns of the interest-rate growth differential (IRGD), an essential variable in the dynamics of the debt ratio; that is, the ratio of government debt to GDP. Essentially, the IRGD is the difference between the interest rate paid on government debt and the growth rate of GDP and drives the inertial or “snowball” dynamics of the debt ratio. The chapter first discusses and quantifies the IRGD-driven snowball effect on debt; this effect turns out to be large but generally of opposite sign in advanced and nonadvanced economies. In the latter, a large negative snowball effect—rooted in negative IRGDs—has allowed sustained significant primary fiscal deficits without exploding debt ratios. The chapter shows that IRGDs are associated with GDP per capita, but that the policy room provided by strongly negative IRGDs may contract over time as a consequence of financial development and globalization. It argues that negative IRGDs are not rooted in a long-term income catch-up process but in negative real interest rates brought about by financial repression that stunts economic growth.

This book examines whether economic growth can be reconciled with sufficient care for the natural environment, or whether an increasing scarcity of natural resources will eventually force economic growth to cease. It addresses the fundamental question of whether sustainable development or sustainability is feasible. It also studies the growth of per capita GDP and asks why per capita GDP is an essential indicator of welfare. Using some basic tools of economic growth theory that have been developed over more than five decades, including the Solow growth model, the book analyses the feasibility of sustainable development when natural resources and pollution are taken into account.

Most observers expect Southern Europe to experience a lost decade as a result of the euro crisis. The record since the beginning of the euro crisis in 2009 is mixed. Major fiscal efforts have been made, a raft of reforms has been introduced, and the gap with the most competitive countries has been narrowed. However, because of imbalances accumulated in the decade preceding the crisis, the road is still long and Europe, unfortunately, has not yet devised a comprehensive strategy to tackle the problem. Supportive monetary policy and stronger inflation in countries such as Germany would help rebalancing, especially if is accompanied by a depreciation of the euro. The Commission also has a responsibility for implementing the fiscal framework in an economically sensible way. Europe, finally, has instruments it can use to help foster southern Europe’s adjustment. However, what Europe could in the end achieve is uncertain. Policymakers believe that a combination of budgetary adjustment and reform should be sufficient to restore full employment and external balance but this may be more difficult than thought. Europe may in the end be confronted by a choice between two opposite economic models: the “agglomeration model” and the “rebalancing model”. Both show that beyond the immediate macroeconomic and financial urgencies, the euro area is confronted with deeper choices about the type of economy it wants and the degree to which it is willing to accept the political consequences of its economic choices.

A Citizen's Income is an unconditional and nonwithdrawable income for every individual as a right of citizenship. It would ameliorate the poverty and unemployment traps, hence boosting employment; it would provide a safety net for all citizens; and it would create a platform on which all citizens could build. It would encourage both individual freedom and social cohesion. Six fundamental changes would be that citizenship would become the basis of entitlement; the individual would be the tax/benefit unit; the Citizen's Income would not be withdrawn as other income rose; availability for work rules would be abolished; access to a Citizen's Income would be easy and unconditional; and benefit levels might be indexed to earnings or to GDP per capita. Three frequently asked questions are addressed: Would people still work± They would. Is it fair to ask people in employment to pay for everyone to receive a Citizen's Income± People in work already fund means-tested benefits, which discourages self-reliance. A Citizen's Income would encourage self-reliance. Isn't guaranteeing a right to work a better way to prevent poverty± A Citizen's Income would make the labour market more free and flexible, thus improving the availability of employment.

Chapter 14 does not design a general theory of religious change, but develops a multiple theoretical perspective including various theoretical elements, which are instrumental for explaining religious changes and which can be combined flexibly. In brief, they are: 1. Functional differentiation as a rule stands in a strained relationship to the integrational capacity of religious communities and churches. If, however, religious identities are linked with non-religious, for example, political, national, or economic interests, religion and church are strengthened. 2. Processes of individualization mostly have an erosive impact on religious ties. 3. In contrast to the assumptions of the market model, religious pluralism does not foster religious vitality, but actually inhibits it. In the case of conflict, though, religious diversity can fuel religious passions. Other determining factors such as government regulations of the religious sector, state spending on the welfare system, social inequality, immigration, and path dependency are also taken into account.