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Testing economic convergence in non-stationary panel

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  • Abdou-Aziz Niang

    (University of Ziguinchor)

Abstract

This paper emphasizes the role of Panel Analysis of Nonstationarity in the Idiosyncratic and Common components (PANIC) in purging effects of cross-country correlation and structural instability from the convergence equation. In doing so, we run some simulations to show that, in addition to controlling correlations, PANIC handles the presence of a single structural change naturally and then solves the problems of low power that it generates. Applications are also conducted using a sample of 20 OECD member countries and 20 countries in Sub-Saharan Africa.

Suggested Citation

  • Abdou-Aziz Niang, 2017. "Testing economic convergence in non-stationary panel," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 26(1), pages 135-156, March.
    • Handle: RePEc:spr:stmapp:v:26:y:2017:i:1:d:10.1007_s10260-016-0361-z
    DOI: 10.1007/s10260-016-0361-z
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