Empirical Cross-Section Dynamics in Economic Growth

Danny Quah ()

FMG Discussion Papers from Financial Markets Group

Abstract: Traditional empirical strategies for studying convergence - more generally, the dynamics and determinants of economic growth, can be misleading if important, underlying permanent or growth components are stochastically time-varying. This paper documents the degree to which this instability characterises the data, and then offers an alternative empirical framework. This alternative, directly modelling the dynamics of the evolving cross-section distributions, applied to cross-country income data yields some interesting insights: economies across the world seem to be converging to a distribution where many remain wealthy, and many remain poor. Those economies able to make the transition from low to high income levels are primarily small and sparsely populated; middle-income ones, by contrast, are a vanishing class.

Date: 1992-11
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Related works:
Working Paper: Empirical cross-section dynamics in economic growth (1992)
Journal Article: Empirical cross-section dynamics in economic growth (1993)
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Persistent link: http://EconPapers.repec.org/RePEc:fmg:fmgdps:dp154

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