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Convergence in the OECD: Transitional Dynamics or Narrowing Steady-State Differences?

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  • Javier Andrés
  • José E. Boscá
  • Rafael Doménech

Abstract

In this article we show that the picture emerging from models that allow for generalized parameter heterogeneity in convergence equations changes our view of the convergence process within the OECD. Estimation methods that allow for non- or partial heterogeneity stress the importance of transitional dynamics. Thus the observed reduction in the dispersion of per capita income is mostly explained by transitional dynamics. When generalized parameter heterogeneity is allowed for, we find that the observed narrowing of incomes has little bearing on transitional dynamics. Convergence in this case happens because the long-run features of these countries are becoming increasingly similar. (JEL C13, C23, O41, O57) Copyright 2004, Oxford University Press.

Suggested Citation

  • Javier Andrés & José E. Boscá & Rafael Doménech, 2004. "Convergence in the OECD: Transitional Dynamics or Narrowing Steady-State Differences?," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 141-149, January.
    • Handle: RePEc:oup:ecinqu:v:42:y:2004:i:1:p:141-149
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    Cited by:

    1. Mountford, Andrew, 2022. "Economic Growth Analysis When Balanced Growth Paths May Be Time Varying," MPRA Paper 114249, University Library of Munich, Germany.
    2. Kilinc, Mustafa & Neyapti, Bilin, 2012. "Bank regulation and supervision and its welfare implications," Economic Modelling, Elsevier, vol. 29(2), pages 132-141.
    3. Rosa Bernardini Papalia & Silvia Bertarelli, 2010. "Evaluating Total Factor Productivity Differences by a Mapping Structure in Growth Models," International Regional Science Review, , vol. 33(1), pages 31-59, January.

    More about this item

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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