Comparing the Speed of Convergence in American Integration Areas

Yvonne Sperlich

Applied Econometrics and International Development, 2013, vol. 13, issue 1, 77-88

Abstract: Economic growth theory predicts more success for North-South than for South-South agreements. We compare the speed of convergence of the North-South area NAFTA with that of the South-South area SICA and the one of the MERCOSUR. We apply GSL fixed effects and a random effects regression with the Mundlak device, respectively, both with an AR(1) errors. The results indicate that Southern agreement areas clearly converge faster, whereas the within-convergence is faster for NAFTA. But when looking at the confidence intervals, it is shown that the absolute information value of the area-specific speed of convergence is rather limited.

Keywords: regional integration; speed of convergence; Latin America; NAFTA; MERCOSUR; CAIS; free trade areas; economic development. (search for similar items in EconPapers)
JEL-codes: E13 F15 F43 O11 O43 (search for similar items in EconPapers)
Date: 2013
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