Barro and Sala-i-Martin (1992) examine convergence in per capita income and product across the 48 contiguous U.S. states using a neoclassical growth model. They find evidence of convergence, with poorer states growing faster than richer ones. The results align with the neoclassical model only if diminishing returns to capital are slow. The study also shows that convergence is conditional, meaning it depends on factors like steady-state characteristics and technological progress. The findings for U.S. states are similar to those from a broad cross-section of countries, but some puzzles arise when reconciling the data with open-economy extensions of the model. The study highlights the importance of capital, technology, and preferences in determining convergence. The empirical analysis uses data on personal income and gross state product, and finds that the convergence coefficient (β) is around 0.02 per year. The results suggest that convergence is slower than predicted by the neoclassical model, which may be due to the slow diminishing returns to capital. The study also compares the convergence of income and product across the U.S. states with findings from cross-country studies, finding similar results. The authors conclude that convergence is a key economic issue, and that the neoclassical growth model provides a useful framework for understanding it. The study also discusses the role of factors such as migration, technology diffusion, and credit markets in promoting convergence. The authors suggest that an open-economy growth model that incorporates these factors may help resolve the puzzle of similar convergence rates for income and product.Barro and Sala-i-Martin (1992) examine convergence in per capita income and product across the 48 contiguous U.S. states using a neoclassical growth model. They find evidence of convergence, with poorer states growing faster than richer ones. The results align with the neoclassical model only if diminishing returns to capital are slow. The study also shows that convergence is conditional, meaning it depends on factors like steady-state characteristics and technological progress. The findings for U.S. states are similar to those from a broad cross-section of countries, but some puzzles arise when reconciling the data with open-economy extensions of the model. The study highlights the importance of capital, technology, and preferences in determining convergence. The empirical analysis uses data on personal income and gross state product, and finds that the convergence coefficient (β) is around 0.02 per year. The results suggest that convergence is slower than predicted by the neoclassical model, which may be due to the slow diminishing returns to capital. The study also compares the convergence of income and product across the U.S. states with findings from cross-country studies, finding similar results. The authors conclude that convergence is a key economic issue, and that the neoclassical growth model provides a useful framework for understanding it. The study also discusses the role of factors such as migration, technology diffusion, and credit markets in promoting convergence. The authors suggest that an open-economy growth model that incorporates these factors may help resolve the puzzle of similar convergence rates for income and product.