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Abstract:

Econometrics Paper
Convergence Empirics Across Economies with (Some)Capital Mobility (Now published in Journal of Economic Growth, vol.1, No.1 ( March 1996),pp.95-124.)
Danny Quah  1994
Paper No' EM/1994/275:


Tags: growth and fluctuations; cross-country distribution of income; convergence hypothesis; intra-distribution mobility; capital investment

This paper reinterprets a simple model of growth and fluctuations across many economies to allow explicitly characterizing the dynamically evolving corss-economy distribution of income. Such a framework provides a more natural, revealing study of the convergence hypothesis. The data show limited intra-distribution mobility in incomes across economies and, thus, little convergence. Our analysis uncovers some 'convergence club'-like dynamics, and reveals the wide diversity in growth experiences across countries. Conditioning on physical capital investment, secondary school enrolment, and a dummy for the African continent falls to overturn these characterizations.