Convergence Clubs in Physical and Human Capital

Carlos Mendez-Guerra

Chapter Chapter 5 in Convergence Clubs in Labor Productivity and its Proximate Sources, 2020, pp 41-51 from Springer

Abstract: Abstract This chapter studies convergence in capital accumulation across developed and developing countries, respectively. Through the lens of a non-linear dynamic factor model, the cross-country dynamics of physical and human capital are evaluated over the 1990–2014 period. For developed countries, results reject the hypothesis that all countries would eventually converge to a common steady-state growth path in terms of both physical and human capital. For this group of countries, the dynamics of physical capital (human capital) are characterized by two convergence clubs with largely (weakly) separating trends. For developing countries, results only reject the convergence hypothesis in terms of human capital. The dynamics of physical capital are characterized by a unique convergence club, while the dynamics of human capital are characterized by three largely separated and parallel clubs.

Keywords: Club convergence; Physical capital; Human capital; Non-linear dynamic factor model; Developed countries; Developing countries (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-981-15-8629-3_5

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DOI: 10.1007/978-981-15-8629-3_5

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