Re-examination of the convergence hypothesis among OECD countries: Evidence from Fourier quantile unit root test

Mohsen Bahmani-Oskooee, Tsangyao Chang, Elmi, Zahra (Mila) and Omid Ranjbar ()

International Economics, 2018, vol. 156, issue C, 77-85

Abstract: In this paper we revisit the convergence hypothesis among OECD countries. Unlike previous research which relied upon conventional unit root tests to determine if per capita real income in each country converge toward the real per capita income of a benchmark level, we employ recently introduced quantile unit root testing procedure which also accounts for multiple and unknown structural breaks via a Fourier expansion series. Our results indicate that the negative shocks due to World wars I and II and/or financial crises have transitory effects in countries such as Japan and Germany, while in other countries like Italy and France they have permanent effects.

Keywords: Convergence; Quantile unit root test; Fourier expansion; OECD (search for similar items in EconPapers)
JEL-codes: E01 E25 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:156:y:2018:i:c:p:77-85

DOI: 10.1016/j.inteco.2017.12.002

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