The Economic Transition and Growth of Philippine Regions

Dennis Mapa (csmapa@up.edu.ph) and Monica Flerida B Sandoval

MPRA Paper from University Library of Munich, Germany

Abstract: The paper applies the economic transition models and econometric convergence tests proposed by Phillips and Sul (2006) using data on per capita Gross Regional Domestic Product (1988-2008) to determine if 14 Philippine regional economies converge to a steady state path over a period of time. The paper explores modeling and analyzing the economic transition behavior of the regions. Regional relative transition paths are investigated to generate a graphical overview of the behavior of the regional economies. The log t convergence test, which is constructed from a transition differential decay model, is used to establish if a region converges to a steady state path or diverges from a steady state path. The test basically provides the basis for a stepwise clustering algorithm in finding convergence clusters and analyzing transition behavior between clusters. The paper identifies convergence clubs and determines divergent regional economies using a recursive procedure that revolves around the log t convergence test.

Keywords: log t convergence test; convergence clubs (search for similar items in EconPapers)
JEL-codes: R11 R58 (search for similar items in EconPapers)
Date: 2011-01
New Economics Papers: this item is included in nep-cmp and nep-geo
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