Testing for Output Convergence: A Re-examination

Yin-Wong Cheung and Antonio Garcia-Pascual
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Antonio Garcia-Pascual: International Monetary Fund

No 52004, Working Papers from Hong Kong Institute for Monetary Research

Abstract: This paper investigates output convergence for the G7 countries using panel time-series techniques. We consider both the null hypotheses of no convergence and convergence. It is shown that inferences on output convergence depend on which one of the two null hypotheses is considered. Further, the no convergence results reported in previous studies using the time-series definition may be attributed to the low power of the test procedures being used. Our results also highlight some potential problems on interpreting results from some typical panel unit root and stationarity tests.

Keywords: Output convergence; panel data test; unit root test; stationarity test (search for similar items in EconPapers)
JEL-codes: C32 O40 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2004-03
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Citations: View citations in EconPapers (30)

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Related works:
Journal Article: Testing for output convergence: a re-examination (2004)
Working Paper: Testing for Output Convergence: A Re-Examination (2000)
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