Convergence

Danny Quah

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Kelly (1992) has recently shown evidence on convergence cannot be taken as evidence against endogenous growth in general. This study uses a well-known class of stochastic growth models to show other difficulties with traditional empirical studies of convergence. Key parameters typically cannot be estimated consistently in cross-sectional regressions. When the parameters are assumed known, implications for convergence are unavailable except under restrictive and economically unmotivated assumptions. Those same assumptions that relate key parameters to cross-country convergence render cross-section regressions impossible to estimate consistently.

Date: 1996-03
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0290

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