Testing for convergence clubs in income per-capita: A predictive density approach

Fabio Canova

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The paper proposes a technique to jointly test for groupings of unknown size in the cross sectional dimension of a panel and estimates the parameters of each group, and applies it to identifying convergence clubs in income per-capita. The approach uses the predictive density of the data, conditional on the parameters of the model. The steady state distribution of European regional data clusters around four poles of attraction with different economic features. The distribution of income per-capita of OECD countries has two poles of attraction and each group has clearly identifiable economic characteristics.

Keywords: Heterogeneities; panel data; predictive density; income inequality (search for similar items in EconPapers)
JEL-codes: C11 D90 O47 (search for similar items in EconPapers)
Date: 1997-07, Revised 1999-06
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (31)

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Related works:
Journal Article: Testing for Convergence Clubs in Income Per Capita: A Predictive Density Approach (2004)
Working Paper: Testing for Convergence Clubs in Income Per-Capita: A Predictive Density Approach (2001)
Working Paper: Testing for convergence clubs in income per-capita: A predictive density approach (2001)
Working Paper: Testing for Convergence Clubs in Income per-capita: A Predictive Density Approach (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:404

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