This book introduces a modern framework to study the cross-country convergence dynamics of labor productivity and its proximate sources: capital accumulation and aggregate efficiency.
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.