Except for aggregate efficiency, we reject the hypothesis that all provinces would eventually converge to a common steady-state path in terms of labor productivity, physical capital, and human capital. Low efficiency is still a problem for Indonesia
Results from the distributional convergence approach indicate the existence of two local convergence clusters within the overall and pure efficiency distributions.
The paper incorporates some recent developments from the unsupervised machine learning literature to re-evaluate the cross-country convergence hypothesis in a context beyond GDP. The application of a distribution-based clustering algorithm suggests the formation of three local convergence clubs.