|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CVER | CEP | FMG | SERC | STICERD||Cookies?|
Paper No' EM/1995/281:
Save Reference as: BibTeX File | EndNote Import File
Keywords: evolving distributions; Galton's fallacy; polarization; regional dynamics; stochastic kernel; unit root.
Is hard copy/paper copy available? NO - Paper Copy Out Of Print.
This Paper is published under the following series: Econometrics
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:The convergence hypothesis has generated a huge empirical literature: this paper critically reviews some of the earlier key findings, clarifies their implications, and relates them to more recent results. Particular attention is devoted to interpreting convergence empirics. The main findings are: (1) The much-heralded uniform 2% rate of convergence could arise for reasons unrelated to the dynamics of eonomic growth. (2) Usual empirical analyses - cross-section (conditional) convergence regressions, time series modelling, panel data analysis - can be misleading for understanding convergence; a model of polarization in economic growth clarifies those difficulties. (3) The data, more revealingly modelled, show persistence and immobility across countries: some evidence supports Baumol's idea of 'convergence clubs'; some evidence shows the poor getting poorer, and the rich richer, with the middle class vanishing. (4) Convergence, unambiguous up to sampling error, is observed across US states.
Copyright © STICERD & LSE 2005 - 2015 | LSE, Houghton Street, London WC2A 2AE | Tel: +44(0)20 7955 6699 | Email: firstname.lastname@example.org | Site updated 07 October 2015