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Income Disparity between Japan and ASEAN-5 Economies: Converge, Catching Up or Diverge?

Author

Listed:
  • Kian-Ping Lim

    (Labuan School of International Business and Finance, Universiti Malaysia Sabah)

  • M. Azali

    (Faculty of Economics and Management, Universiti Putra Malaysia)

  • Hock-Ann Lee

    (Labuan School of International Business and Finance, Universiti Malaysia Sabah)

Abstract

The objective of this study is to empirically examine the income disparity between Japan and each of the five major economies of South East Asia (ASEAN-5) during the period of 1960 to 1997, utilizing the popular augmented Dickey-Fuller (ADF) unit root test. The results provide evidence of income divergence between Japan and each of the ASEAN-5 economies. To avoid the problem associated with structural break, this study proceeds with the jointly crash and changes in trend model proposed by Zivot and Andrews (1992), and is able to obtain evidence of long run income convergence between the Japanese and Singaporean economies. As for the rest of the four ASEAN countries- Indonesia, Malaysia, the Philippines and Thailand, the earlier results of income divergence remain valid and hence suggest that it would be a more realistic and urgent goal to narrow the income gap among these five core economies of ASEAN.

Suggested Citation

  • Kian-Ping Lim & M. Azali & Hock-Ann Lee, 2005. "Income Disparity between Japan and ASEAN-5 Economies: Converge, Catching Up or Diverge?," Economics Bulletin, AccessEcon, vol. 6(13), pages 1-20.
    • Handle: RePEc:ebl:ecbull:eb-05f40002
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    References listed on IDEAS

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    3. Gómez, Manuel & Ventosa-Santaulària, Daniel, 2007. "Income convergence: the Dickey-Fuller test under the simultaneous presence of stochastic and deterministic trends," MPRA Paper 58778, University Library of Munich, Germany.
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    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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