Convergence on macro scale | GDP: Measuring national income | Macroeconomics | Khan Academy

We've talked about things that might drive inequality, things that Thomas Piketty refers to as forces of divergence. But now, let's think about, or at least some of what he cites as forces of convergence. So, forces of convergence are things that might make the world a more equal place.

The primary one that he cites is one that's very close to my heart, and this is the spread of knowledge. What we have here is a couple of charts that show the spread of knowledge, at least on a macro basis, on a regional basis, and show how it has been a driver of starting to equalize global output.

As we start in 1700, we see that it's going from 1700 through the Industrial Revolution. Frankly, as the West was developing or industrializing, the West, Europe and America, became a larger and larger percentage of global output, and Asia became a smaller and smaller percentage.

But then, as you go into the second half of the 20th century and into the 21st century, you see that dynamic change. Asia's percentage of world output is increasing more and more, and that's arguably happening because you've had a transfer of knowledge, a diffusion of knowledge from the West to the East, to the East for modern manufacturing techniques and design techniques and engineering techniques and whatever else.

That's why, as we are in the beginning of the 21st century, Asia is turning into a major industrial powerhouse. They've learned from the West, and in some dimensions, are even improving on some of the dynamics from, or some of the knowledge from the West, to make themselves more and more productive.

So, at least on a regional basis, this shows that the world is becoming more equal because of this spread of knowledge. We could also see it on a per capita basis.

So, this right over here, this is global, well, this is essentially plotting over time per capita GDP as a percentage of world average. The world average, right over here, is obviously 100 percent of the world average, so that's why it's just a flatline at 100 percent.

As we go through the Industrial Revolution, Europe and America, essentially the West, its per capita GDP becomes a larger and larger percentage of the average per capita GDP for the globe. But that was true until recently, until the last few decades.

In the last few decades, as a percentage, it's gone down. That doesn't mean that per capita GDP is going down; it just means that its share, as a percentage of world average, is going down. That's really because Asia's per capita GDP has been growing even faster, because of, once again, that spread of knowledge.

At least this idea of the spread of knowledge does seem to be playing out at a regional level. It's bringing, at least right now, it seems like Asia is participating much more than Africa. But it's starting to bring the non-West, I guess, you know, the East, more in line with the West in terms of productive capacity and wealth per person and per capita GDP, however you want to look at it.

Now, an interesting question that's at a regional level: what about an individual level? We'll talk about that more in the next video.