The production function approach suggests that countries should experience convergence in the levels of output per worker through the flow of capital across countries. One possible problem with the production function approach is the assumption that countries have the same capital shares. Poorer countries may have lower shares of income earned from capital relative to those in richer countries. Based on this information, discuss the implications for diversification of differences in capital income share in rich versus poor countries. Are poor countries in a better position to engage in risk sharing with high capital income shares or low ones? Explain.