Abstract
Early convergence models assumed immobile capital. A general equilibrium of Ramsey agents with capital mobility either perfect, or inhibited only by adjustment costs or borrowing constraints, allows the possibility of:
From a partial equilibrium analysis for a small country, where human capital accumulation cannot be financed by borrowing, Barro, Mankiw and Sala-i-Martin (1995) shows that low human capital countries grow faster. The persistent income inequality demonstrated by these authors generalizes to a steady state general equilibrium. When intertemporal general equilibrium exists, it is shown how convergence results generalize.