Paradise Lost? Growth, Convergence and Migration in the South Pacific

Norman Loayza () and Paul Cashin ()

No 1995/028, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the determinants of growth for nine South Pacific countries during the period 1971-93, using the analytical framework of the Solow-Swan neoclassical growth model. Chamberlain’s II-matrix estimator is used to account for unobserved country-specific heterogeneity in the growth process, and to control for errors-in-variables bias in calculations of real per-capita GDP. The speed of convergence of South Pacific countries to their respective steady-state levels of per-capita GDP, after controlling for the important regional effects of net international migration, is estimated at a relatively fast 4 percent per year. In addition, private and official transfers emanating from regional donor countries have kept the dispersion of real per-capita national disposable income constant over the period, despite a significant widening in the regional dispersion of real per-capita GDP.

Keywords: WP; growth rate; per-capita GDP; Island economy; II-matrix estimation procedure; procedure consist; per-capita income; rate of growth; island economies of the South Pacific; time series; Personal income; Migration; National income; Public expenditure review; Disposable income; Australia and New Zealand (search for similar items in EconPapers)
Pages: 42
Date: 1995-03-01
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Citations: View citations in EconPapers (11)

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Journal Article: Paradise Lost? Growth, Convergence, and Migration in the South Pacific (1995)
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