Abstract

Drawing on the entropy law, this paper proposes a moving-target model to investigate the long-run convergence of countries' per capita income toward the average income of their reference group. Using evidence from the global economy and the European Union, we show that income convergence follows dynamics consistent with entropy-based physical systems. However, while convergence is observed across countries, regional and sub-regional disparities within countries often widen, indicating that convergence at the macro level may coexist with divergence at lower territorial levels.