Uncertain lifetimes and convergence in a two-country Heckscher–Ohlin model

•With Heckscher–Ohlin trade structure, no convergence in infinite horizon dynamic models.•With uncertain lifetimes, get convergence.•Aggregate consumption growth is pulled down by existing capital stock.

In a two-country infinite-horizon model, with two traded goods and two factors of production and no international borrowing and lending, there is no convergence of incomes if there is factor-price equalization. With factor-price equalization, the Euler equations of the two economies become identical. I show that in such a set-up if agents have a non-zero probability of death, then we do get convergence. In the steady state the two economies have identical capital–labor ratios and revert to autarky.