Revisiting the Solow-Swan model of income convergence in the context of coffee producing and re-exporting countries in the world

Abstract

The purpose of this paper is to investigate the Solow-Swan's proposition that poorer countries grow faster than richer countries causing declining income disparities across countries. The role of coffee trade in income convergence is also analyzed to enrich our understanding of whether traditional cash export crops, like coffee, contribute significantly to income convergence. We found that, GDP per capita was growing faster among coffee producers than coffee re-exporters, supporting the Solow-Swan's model. However, coffee export values and shares decreased with convergence for green coffee producers while increasing among re-exporters, implying unequal distribution of benefits along the global coffee value chain.

Keywords

• GDP per capita convergence
• Coffee
• Coefficient variation
• σ-convergence
• β-convergence
• Solow-Swan model