income convergence toward usa: new evidences for latin and south american countries

Authors

omid ranjbar

department of economics, allameh-tabataba'i university, tehran, iran tsangyao chang

department of finance, feng chia university, taichung, taiwan. chien-chiang lee

department of finance, national sun yat-sen university, kaohsiung, taiwan.

abstract

abstract in this paper we test two versions of convergence hypothesis namely deterministic or conditional convergence and stochastic or catching up hypothesis using carrion-i-silvestre et al. (2005) stationary test. the results show latin and south american countries (lsa) catching up process toward the usa failed in 1980s and somewhat in 1990s. but in 2000s most of them could lie in convergence path. dispersion of break dates show that structural breaks in lsa convergence were affected by trade policies, terms of trade shocks and also war. for example, terms of trade shocks due to volatility of primary goods prices such as sugar, copper, cotton, petroleum oil, coffee, bauxite, aluminum, and rice affected the convergence process in lsa countries.

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Journal title:
iranian economic review

جلد ۲۰، شماره ۲، صفحات ۱۴۱-۱۶۲

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