Abstract
Abstract Various published literatures on world economic growth during the period 1980-2000, have referred to that period as lost decades (for example, William Easterly, 2001; World Economic Outlook, 2001). Some overwhelming international economic, political and social events have caused retardation and increased volatility in economic growth during those two decades. Numerous studies on economic growth have dealt with, among other objectives, its causes and the estimation of unconditional and conditional convergence. They focused their analysis on the period 1960-1995 as a whole, using cross sectional or panel data, without treating growth during the lost decades separately. (such as, Barro, 1996; Bosworth et al, 1995). This study particularly concerned with the period (1990-2002), during which growth was low and volatile. It has added two new instability variables that passed the robustness test, to the conventional variables in the regression equation to explain growth. The study has also focused on measuring conditional convergence rate, with the application of channel decomposition, by using cross sectional data on 72 countries, segregated into two groups according to their patterns of growth as designed by Pritchett (2000). The study concludes that convergence of income per capita has declined considerably during the period of the study as compared with previous periods. .
