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Re-examination of the convergence hypothesis among OECD countries: Evidence from Fourier quantile unit root test

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  • Bahmani-Oskooee, Mohsen
  • Chang, Tsangyao
  • Elmi, Zahra (Mila)
  • Ranjbar, Omid

Abstract

In this paper we revisit the convergence hypothesis among OECD countries. Unlike previous research which relied upon conventional unit root tests to determine if per capita real income in each country converge toward the real per capita income of a benchmark level, we employ recently introduced quantile unit root testing procedure which also accounts for multiple and unknown structural breaks via a Fourier expansion series. Our results indicate that the negative shocks due to World wars I and II and/or financial crises have transitory effects in countries such as Japan and Germany, while in other countries like Italy and France they have permanent effects.

Suggested Citation

  • Bahmani-Oskooee, Mohsen & Chang, Tsangyao & Elmi, Zahra (Mila) & Ranjbar, Omid, 2018. "Re-examination of the convergence hypothesis among OECD countries: Evidence from Fourier quantile unit root test," International Economics, Elsevier, vol. 156(C), pages 77-85.
    • Handle: RePEc:eee:inteco:v:156:y:2018:i:c:p:77-85
    DOI: 10.1016/j.inteco.2017.12.002
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    Cited by:

    1. Matonana, Ntombiyesibini & Phiri, Andrew, 2024. "Who in the World can Africa Catch-up to? Evidence from Income Convergence Analysis," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(3), pages 417-444.
    2. Lee, Yi-Lung & Ranjbar, Omid & Jahangard, Fateme & Chang, Tsangyao, 2020. "Analyzing slowdown and meltdowns in the African countries: New evidence using Fourier quantile unit root test," International Review of Economics & Finance, Elsevier, vol. 65(C), pages 187-198.

    More about this item

    Keywords

    Convergence; Quantile unit root test; Fourier expansion; OECD;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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