I would appreciate help in understanding the following passage from the CFA Lv. 2 material (book 1, page 750).
Neoclassical growth theory predicts two types of convergence: absolute convergence and conditional convergence. Absolute convergence means that developing countries, regardless of their particular characteristics, will eventually catch up with the developed countries and match them in per capita output. The neoclassical model assumes that all countries have access to the same technology. As a result, per capita income in all countries should eventually grow at the same rate. Thus, the model implies convergence of per capita growth rates among all countries. It does not, however, imply that the level of per capita income will be the same in all countries regardless of underlying characteristics; that is, it does not imply absolute convergence.
(My emphasis).
Is someone in a position to untangle this paragraph for me? It seems to simultaneously say that Neoclassical growth theory “predicts” absolute convergence and that it does not “imply” absolute convergence.
I understand what absolute convergence means: poorer countries will one day match the GDP/capita of richer countries.
I also think I understand neoclassic growth theory. But I do not understand the relationship between these two concepts and the CFA paragraph above seems to contradict itself so it’s hardly illuminating.
What’s going on here? Thanks for your help.