The article by Robert J. Barro and Xavier Sala-i-Martin examines the convergence of per capita income and product across U.S. states using data from 1840 to 1986. They find that poor states tend to grow faster than rich states, supporting the neoclassical growth model, which predicts that diminishing returns to capital set in slowly. The estimated convergence coefficient, β, is around 0.02 per year, indicating a half-life of about 5.5 years for the log of output per effective worker. The findings are consistent with the model if capital is interpreted broadly to include human capital. The authors also compare these results with those from a broad sample of countries, finding similar rates of convergence for income and product, which is puzzling from the perspective of open-economy extensions of the neoclassical growth model. They suggest that this puzzle may be resolved by incorporating credit markets, factor mobility, and technological diffusion into an open-economy growth model.The article by Robert J. Barro and Xavier Sala-i-Martin examines the convergence of per capita income and product across U.S. states using data from 1840 to 1986. They find that poor states tend to grow faster than rich states, supporting the neoclassical growth model, which predicts that diminishing returns to capital set in slowly. The estimated convergence coefficient, β, is around 0.02 per year, indicating a half-life of about 5.5 years for the log of output per effective worker. The findings are consistent with the model if capital is interpreted broadly to include human capital. The authors also compare these results with those from a broad sample of countries, finding similar rates of convergence for income and product, which is puzzling from the perspective of open-economy extensions of the neoclassical growth model. They suggest that this puzzle may be resolved by incorporating credit markets, factor mobility, and technological diffusion into an open-economy growth model.