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Econometric Aspects of Convergence: A Survey

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  • Ron P. Smith

    (Birkbeck. University of London)

Abstract

The literature on convergence in per-capita income across countries has not converged on a common concept of convergence. It may be within a country towards its own steady state or between countries. Between country convergence may be absolute convergence to the same steady state; conditional convergence to country specific steady states, functions of observed variables; or club convergence to different steady states. It may be measured by beta convergence; sigma convergence; or the presence of a common trend. This paper surveys the econometric issues involved in estimating the rate of convergence; testing for convergence; and specifying the unobserved steady state. The survey suggests that rather than there being different ways to measure a single concept, convergence, the different measures are measuring different things.

Suggested Citation

  • Ron P. Smith, 2024. "Econometric Aspects of Convergence: A Survey," Open Economies Review, Springer, vol. 35(4), pages 701-721, September.
    • Handle: RePEc:kap:openec:v:35:y:2024:i:4:d:10.1007_s11079-024-09753-w
    DOI: 10.1007/s11079-024-09753-w
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    2. Kian Ong, 2024. "Do Countries Converge to Their Steady States at Different Rates?," Open Economies Review, Springer, vol. 35(4), pages 723-749, September.

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