Persistence in Convergence: Some further results

Thanasis Stengos, Ege Yazgan () and Harun Ozkan ()

No 1605, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: In this paper, we examine the convergence hypothesis using a long memory framework that allows for structural breaks and does not rely on a benchmark country using both univariate and multivariate estimates of the long memory parameter d. Using per capita GDP gaps, we confirm the findings of non-stationarity and long memory behavior that have been found previously in the literature using univariate tests. However, the support for these findings is much weaker when using a multivariate framework, in which case we find more evidence of stationary behavior. Based on these results, we also investigate club formation, something that would suggest the presence of conditional convergence. We describe a club formation methodology using the sequential testing criteria that we have employed in our analysis as the basis for forming clusters or clubs of countries with similar convergence characteristics.

Keywords: growth convergence; convergence clubs; long memory (search for similar items in EconPapers)
JEL-codes: C32 O47 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gue:guelph:2016-05

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