A clear pattern of regional divergence for the period 1988-2000. In contrast, the 2000-2014 period points to a much more complex pattern of di-convergence: the long-run equilibrium distribution is characterized by both a process of convergence arising from the top and a process of divergence near its bottom tail.
Cross-country productivity disparities rapidly increased in the 1980s, slowed down in the next decade, and stabilized in the mid-2000s. The upper tail the productivity distribution is more sensitive to improvements in human capital, while the lower tail is more sensitive to improvements in technology.
Differences in welfare-adjusted development are larger than those predicted by per-capita GDP. Differences in labor productivity account for most of the differences in both production and welfare-adjusted development. Inefficient production is the main factor holding down labor productivity.