TESTING CATCHING-UP BETWEEN THE DEVELOPING COUNTRIES: “GROWTH RESISTANCE” AND SOMETIMES “GROWTH TRAGEDY”

Gilles Dufrénot (), Valérie Mignon () and Théo Naccache

Bulletin of Economic Research, 2012, vol. 64, issue 4, 470-508

Abstract: type="main" xml:lang="en">

This paper provides empirical evidence that there is no convergence between the GDP per-capita of the developing countries since 1950. Relying upon recent econometric methodologies (non-stationary long-memory models, wavelet models and time-varying factor representation models), we show that the transition paths to long-run growth (the catch-up dynamics) are very persistent over time and non-stationary, thereby yielding a variety of potential steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates per-capita output divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per-capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence.

Date: 2012
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