An examination of convergence hypothesis for EU-15 countries
Reşat Ceylan and
Vasif Abiyev ()
International Review of Economics & Finance, 2016, vol. 45, issue C, 96-105
In this paper we investigate whether EU-15 countries experience convergence in per capita GDP levels with respect to the EU-15 average over the period 1950–2015. Nonlinear and nonlinear-asymmetric unit root tests as well as structural break Lagrange Multiplier (LM) unit root tests are employed. When nonlinear and nonlinear-asymmetric unit root tests are employed, five countries exhibit long-run or deterministic convergence with the EU-15 average. However, when endogenous structural break LM unit root tests are employed, nine countries exhibit stochastic convergence. Test results indicate that real per capita income levels of 11 EU countries converge towards the EU-15 average.
Keywords: Nonlinear unit root test; LM unit root test; Stochastic convergence; β-convergence; Structural breaks (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:45:y:2016:i:c:p:96-105
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