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Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach

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  • Juncal Cunado
  • Luis A. Gil-Alana
  • Fernando Pérez de Gracia

Abstract

This article examines the real convergence hypothesis in 15 OECD countries. For this purpose, we examine the order of integration of the real GDP per capita series in these countries as well as their differences with respect to the US which is used as a benchmark country. We use both parametric and semiparametric methods and the results show that convergence is only achieved in half of the countries, namely, Austria, Australia, Canada, Finland, Germany, Japan and the UK. On the contrary, the results for Belgium, Denmark, France, Italy, the Netherlands, Norway and Sweden show strong evidence against this hypothesis.
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  • Juncal Cunado & Luis A. Gil-Alana & Fernando Pérez de Gracia, 2006. "Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 67-91, April.
    • Handle: RePEc:spr:weltar:v:142:y:2006:i:1:p:67-91
    DOI: 10.1007/s10290-006-0057-9
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    2. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    3. Gilles Dufrénot & Valérie Mignon & Théo Naccache, 2009. "The slow convergence of per capita income between the developing countries: “growth resistance” and sometimes “growth tragedy”," Discussion Papers 09/03, University of Nottingham, CREDIT.
    4. Luis A. Gil-Alana & Sakiru Adebola Solarin & Mehmet Balcilar & Rangan Gupta, 2023. "Productivity and GDP: international evidence of persistence and trends over 130 years of data," Empirical Economics, Springer, vol. 64(3), pages 1219-1246, March.
    5. Nicholas Apergis & Christina Christou & Rangan Gupta & Stephen M. Miller, 2018. "Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology across States in the U.S," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(2), pages 147-161, May.
    6. Michele Caputo & Francesco Forte, 2015. "Difficult Convergence among the Five Main European Union Countries and the Crisis of the Euro Area," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(4), pages 415-430, December.
    7. Nicholas Apergis & Arusha Cooray, 2016. "Old Wine In A New Bottle: Trade Openness And Fdi Flows—Are The Emerging Economies Converging?," Contemporary Economic Policy, Western Economic Association International, vol. 34(2), pages 336-351, April.
    8. Chi-Wei Su & Hsu-Ling Chang, 2013. "Is income converging in China?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(2), pages 341-356, April.
    9. Nan Li & Xunwen Zhao & Hailin Mu & Yimeng Li & Jingru Pang & Yuqing Jiang & Xin Jin & Zhenwei Pei, 2020. "Research on the Self-Repairing Model of Outliers in Energy Data Based on Regional Convergence," Energies, MDPI, vol. 13(18), pages 1-13, September.
    10. Arielle Beyaert, 2004. "Fractional Output Convergence, with an Application to Nine Developed Countries," Econometric Society 2004 Australasian Meetings 280, Econometric Society.
    11. Vítor João Pereira Domingues Martinho, 2021. "Impact of Covid‐19 on the convergence of GDP per capita in OECD countries," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(S1), pages 55-72, November.
    12. A. F. Galvao Jr & F. A. Reis Gomes, 2007. "Convergence or divergence in Latin America? A time series analysis," Applied Economics, Taylor & Francis Journals, vol. 39(11), pages 1353-1360.
    13. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.

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    More about this item

    Keywords

    Real convergence; fractional integration; long memory;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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