Are incomes converging among OECD countries? Time series evidence with two structural breaks
نویسندگان
چکیده
Time series from fifteen OECD countries for the period 1870–1994 are examined to determine if per capita incomes are stochastically converging. To perform our tests, we utilize a minimum Lagrange multiplier unit root test that endogenously determines two structural breaks in level and trend. In contrast to other tests, our test is not subject to rejections of the null in the presence of a unit root with break(s). Overall, our empirical findings provide significant evidence to support that incomes are stochastically converging. One or two permanent breaks in relative income are identified for each country, most often around the two World Wars.
منابع مشابه
Time Series Tests of Income Convergence with Two Structural Breaks: An Update and Extension
This paper uses newly available long-span data on real per capita incomes from 1900-2001 to test for stochastic convergence in a diverse group of 29 countries. To perform our tests, we utilize the two-break LM unit root test of Lee and Strazicich (2003) and endogenously determine two distinct structural breaks in level and trend for each country. Despite including both OECD and non-OECD countri...
متن کاملWhich OIC countries are catching up? Time Series Evidences with Multiple Structural Breaks
Abstract In this paper, income per capita convergence hypothesis is tested in selected OIC countries. For this purpose, we use the time series model and univariate KPSS stationary test with multiple structural breaks (Carrion-i-Silvestre et al. (2005)) over the period 1950-2008. The results show that most OIC countries could not catch up toward USA. Although because of some positive term of tra...
متن کاملReopening the Convergence Debate when Sharp Breaks and Smooth Shifts Wed, 1870-2010
Abstract This paper attempts to re-investigate the catching-up (stochastic convergence) hypothesis among the selected 16 OECD countries applying the time series approach of convergence hypothesis with annual data over one century. To reach this aim, we propose a model which specifies a trend function, incorporating both types of structural breaks – that is, sharp breaks and smooth shifts usin...
متن کاملNew Evidence on the Convergence of International Income from a Group of 29 Countries
This paper updates and extends the time-series evidence on the convergence of international incomes using a set of 29 countries over the period 1900-2001. Time-series tests for stochastic convergence are supplemented with tests which provide evidence on the notion of “$-convergence” predicted by the Solow model. The evidence indicates that the relative income series of 21 countries are consiste...
متن کامل