A Pair-wise Approach to Testing for Output and Growth Convergence

Mohammad Pesaran

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper proposes a pair-wise approach to testing for output convergence that considers all N(N-1)/2 possible pairs of log per capita output gaps across N economies. A general probabilistic definition of output convergence is also proposed. The approach is compatible with individual output series having unit roots, does not involve the choice of a reference country in computation of output gaps, and can be applied when N is large relative to T. The test is applied to output series in the Penn World Tables (1950-2000), and to Maddison's historical series (1870-2000). Overall, the results do not support output convergence and suggest that the findings of convergence clubs in the literature might be spurious. However, significant evidence of growth convergence is found. Non-convergence of log per capita outputs combined with growth convergence suggests that there are important country-specific factors that render output gaps highly persistent.

Keywords: Economic Growth; Panel Data Models; Common Technological Shocks; Convergence (search for similar items in EconPapers)
JEL-codes: C32 C33 D90 O47 (search for similar items in EconPapers)
Pages: 66
Date: 2004-10
New Economics Papers: this item is included in nep-dev
Note: EM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://files.econ.cam.ac.uk/repec/cam/pdf/cwpe0453.pdf (application/pdf)

Related works:
Journal Article: A pair-wise approach to testing for output and growth convergence (2007)
Working Paper: A Pair-Wise Approach to Testing for Output and Growth Convergence (2004)
Working Paper: A Pair-Wise Approach to Testing for Output and Growth Convergence (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0453

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().