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Empirical Evidence on Convergence Across Brazilian States

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  • Lima, Luiz Renato
  • Notini, Hilton Hostalácio
  • Reis Gomes, Fábio Augusto

Abstract

This paper is aimed to analyze the convergence hypothesis across Brazilian States in a 60 year period (1947-2006). In order to test the existence of income convergence, the order of integration of the income differences between each State and São Paulo is examined. São Paulo is the richest State and for this reason is used as a benchmark. First of all, we employed the conventional unit root tests, finding evidence against the convergence hypothesis. However, given the lack of power of unit root tests, especially when the convergence is very low, we used ARFIMA models, which is also theoretically more appropriate [Michelacci and Zaffaroni (2000)]. Even so, the findings of the ARFIMA models cast doubts on the convergence hypothesis

Suggested Citation

  • Lima, Luiz Renato & Notini, Hilton Hostalácio & Reis Gomes, Fábio Augusto, 2010. "Empirical Evidence on Convergence Across Brazilian States," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(2), June.
    • Handle: RePEc:fgv:epgrbe:v:64:y:2010:i:2:a:1481
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    Cited by:

    1. Penna, Christiano Modesto & Linhares, Fabricio Carneiro, 2013. "Há controvérsia entre análises de beta e sigma-convergência no Brasil?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 67(1), April.
    2. Christiano M. Penna & Fabricio Linhares, 2011. "Convergênciae Formação de Clubes no Brasil sob aHipótese de Heterogeneidade no DesenvolvimentoTecnológico," Anais do XXXVII Encontro Nacional de Economia [Proceedings of the 37th Brazilian Economics Meeting] 87, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Mello, Marcelo, 2010. "Stochastic Convergence Across Brazilian States," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 30(1), October.
    4. repec:fgv:epgrbe:v:67:n:1:a:6 is not listed on IDEAS

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