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Norman Loayza and Mr. Paul Cashin

; β is the convergence coefficient; ∊ i, t is an independent error term, and the country-specific constant is C i = g i r + ( 1 − e − β r ) [ ln ⁡ ( y ^ i * ) + g i ⁡ ( t − r ) ] . If we had instead assumed (as do Barro and Sala-i-Martin 1992a) that all PAC9 economies have the same steady-gtaje levels of real per-capita GDP and steady-state growth rates (that is, ⁡ y ^ * = y ^ i * a nd g = g i ), then C i would equal C and equation (2) would imply absolute convergence, if β >0. Two measures of convergence follow from equation (2) . The first, known as

Mrs. Anuradha Dayal-Gulati and Mr. Aasim M. Husain

subperiod, y it is real per capita income at time t , and β is the convergence coefficient. The convergence coefficient (β) indicates the rate at which y it-T approaches the steady state level of GDP per capita. A positive coefficient implies that the poorer provinces grow faster than the richer ones. The higher is β, the more rapid is the convergence to steady state. The variable C is the constant term common across provinces, x it includes the vector of other explanatory variables, and ε it is an independent error term. The usual role of the explanatory

Mariya Brussevich, Shihui Liu, and Mr. Chris Papageorgiou
The paper extends the work of Deaton (2021) by exploring the period of post-crisis recovery in 2021-2024. The paper documents per-capita income divergence during the period of post-shock recovery, with countries at the bottom of the income distribution falling significantly behind. Findings suggest that higher COVID-19 vaccination rates and targeted virus containment measures are associated with faster recovery in per-capita incomes in the medium term. Evidence on the effectiveness of economic support policies for reducing cross-country income inequality, including fiscal and monetary policies, is mixed especially in the case of developing countries.