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Heterogeneous Convergence

Andrew Young (), Matthew Higgins () and Daniel Levy ()

MPRA Paper from University Library of Munich, Germany

Abstract: We use US county-level data containing 3,058 cross-sectional observations and 41 conditioning variables to study economic growth and explore possible heterogeneity in growth determination across 32 individual states. Using a 3SLS-IV estimation method, we find that the convergence rates for 32 individual states are above 2 percent, with an average of 8.1 percent. For 7 states the convergence rate can be rejected as identical to at least one other state’s convergence rate with 95 percent confidence. Convergence rates are negatively correlated with initial income. The size of government at all levels of decentralization is either unproductive or negatively correlated with growth. Educational attainment has a non-linear relationship with growth. The size of the finance, insurance and real estate, and entertainment industries are positively correlated with growth, while the size of the education industry is negatively correlated with growth. Heterogeneity in the effects of balanced growth path determinants across individual states is harder to detect than in convergence rates.

Keywords: Economic Growth; Conditional Convergence; County Level Data (search for similar items in EconPapers)
JEL-codes: O41 O47 R11 (search for similar items in EconPapers)
Date: 2006-10-25
New Economics Papers: this item is included in nep-dev and nep-geo
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Citations: View citations in EconPapers (5) Track citations by RSS feed

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https://mpra.ub.uni-muenchen.de/954/1/MPRA_paper_954.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/46038/8/MPRA_paper_46038.pdf revised version (application/pdf)

Related works:
Journal Article: Heterogeneous convergence (2013) Downloads
Journal Article: Heterogeneous Convergence (2013) Downloads
Working Paper: Heterogeneous Convergence (2013) Downloads
Working Paper: Heterogeneous convergence (2013) Downloads
Working Paper: Heterogeneous Convergence (2013) Downloads
Working Paper: Heterogeneous Convergence (2011) Downloads
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