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A new time-varying method for club convergence analysis

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  • Mateusz Tomal

Abstract

One of the most frequently used methods to test the club convergence hypothesis is the Phillips-Sul approach. However, this method does not allow the verification of whether the number, size, or structure of convergence clubs vary over time. Therefore, this study proposes a new time-varying method for identifying convergence clubs by modifying the Phillips-Sul approach. The new method was applied to data on gross domestic product per capita in selected European countries for 1995–2021. The results reveal that the number of convergence clubs, their size, and their internal structure changed over time.

Suggested Citation

  • Mateusz Tomal, 2024. "A new time-varying method for club convergence analysis," Economics and Business Letters, Oviedo University Press, vol. 13(4), pages 194-202.
    • Handle: RePEc:ove:journl:aid:21204
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/21204
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    1. Peter C. B. Phillips & Zhentao Shi, 2021. "Boosting: Why You Can Use The Hp Filter," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(2), pages 521-570, May.
    2. Peter C. B. Phillips & Donggyu Sul, 2007. "Transition Modeling and Econometric Convergence Tests," Econometrica, Econometric Society, vol. 75(6), pages 1771-1855, November.
    3. Haupt, Harry & Schnurbus, Joachim & Semmler, Willi, 2018. "Estimation of grouped, time-varying convergence in economic growth," Econometrics and Statistics, Elsevier, vol. 8(C), pages 141-158.
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    5. Peter C. B. Phillips & Donggyu Sul, 2009. "Economic transition and growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1153-1185.
    6. Bart Hobijn & Philip Hans Franses, 2000. "Asymptotically perfect and relative convergence of productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(1), pages 59-81.
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