Interpreting tests of the convergence hypothesis

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Recent tests for the convergence hypothesis derive from regressing average growth rates on initial levels: a negative initial level coefficient is interpreted as convergence. These tests turn out to be plagued by Galton’s classical fallacy of regression towards the mean. Using a dynamic version of Galton’s fallacy, I establish that coefficients of arbitrary signs in such regressions are consist...

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ژورنال

عنوان ژورنال: Journal of Econometrics

سال: 1996

ISSN: 0304-4076

DOI: 10.1016/0304-4076(94)01699-2