IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v14y2005i1p93-114.html
   My bibliography  Save this article

Output Convergence and International Trade: Time-Series and Fuzzy Clustering Evidence for New Zealand and her Trading Partners, 1950 - 1992

Author

Listed:
  • David EA Giles

Abstract

Using historical time-series data, we test for convergence and common trends in real per capita output for New Zealand and her four major trading partners. Both bivariate and multivariate time-series methods are used, and we also implement the fuzzy c-means clustering algorithm as a new method for detecting convergence. The results of our time-series analysis accord with earlier studies - we find limited evidence of (only bivariate) convergence, but ample evidence of a small number of common trends. In contrast, our fuzzy clustering analysis reveals very strong evidence of a particular form of output convergence when the five trading countries are considered as a group.

Suggested Citation

  • David EA Giles, 2005. "Output Convergence and International Trade: Time-Series and Fuzzy Clustering Evidence for New Zealand and her Trading Partners, 1950 - 1992," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(1), pages 93-114.
    • Handle: RePEc:taf:jitecd:v:14:y:2005:i:1:p:93-114
    DOI: 10.1080/0963819042000333261
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/0963819042000333261
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0963819042000333261?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Dan Ben-David & Ayal Kimhi, 2001. "Trade and the rate of income convergence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(4), pages 419-441.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    5. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    6. Durlauf, Steven N & Johnson, Paul A, 1995. "Multiple Regimes and Cross-Country Growth Behaviour," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 365-384, Oct.-Dec..
    7. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    8. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    9. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    10. Dolado, Juan J & Jenkinson, Tim & Sosvilla-Rivero, Simon, 1990. "Cointegration and Unit Roots," Journal of Economic Surveys, Wiley Blackwell, vol. 4(3), pages 249-273.
    11. Roberto Cellini & Antonello E. Scorcu, 2000. "Segmented stochastic convergence across the G-7 countries," Empirical Economics, Springer, vol. 25(3), pages 463-474.
    12. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    13. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    14. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
    15. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    16. Slaughter, Matthew J, 1997. "Per Capita Income Convergence and the Role of International Trade," American Economic Review, American Economic Association, vol. 87(2), pages 194-199, May.
    17. Matthew J. Slaughter, 1997. "Per Capita Income Convergence and the Role of International Trade," NBER Working Papers 5897, National Bureau of Economic Research, Inc.
    18. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    19. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    20. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    21. O'Rourke, Kevin Hjortshøj, 1996. "Trade, Migration and Convergence: An Historical Perspective," CEPR Discussion Papers 1319, C.E.P.R. Discussion Papers.
    22. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    23. Matthew J. Slaughter, 1998. "International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis," NBER Working Papers 6557, National Bureau of Economic Research, Inc.
    24. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    25. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    26. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    27. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    28. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    29. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    30. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    31. Gregory, Allan W & Hansen, Bruce E, 1996. "Tests for Cointegration in Models with Regime and Trend Shifts," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 555-560, August.
    32. Attila Hornok & Rolf Larsson, 2000. "The finite sample distribution of the KPSS test," Econometrics Journal, Royal Economic Society, vol. 3(1), pages 108-121.
    33. Dan Ben-David, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 653-679.
    34. Philip Hans Franses, 2001. "How to deal with intercept and trend in practical cointegration analysis?," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 577-579.
    35. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Переводим научные статьи с английского нk
      by andyceo in Andyceo's Words on 2008-09-19 02:13:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chad Stroomer & David E.A. Giles, 2003. "Income Convergence and trade Openness: Fuzzy Clustering and Time Series Evidence," Econometrics Working Papers 0304, Department of Economics, University of Victoria.
    2. David Giles & Chad Stroomer, 2006. "Does Trade Openness Affect the Speed of Output Convergence? Some Empirical Evidence," Empirical Economics, Springer, vol. 31(4), pages 883-903, November.
    3. David E.A. Giles & Hui Feng, 2003. "Testing For Convergence in Output and in 'Well-Being' in Industrialized Countries," Econometrics Working Papers 0302, Department of Economics, University of Victoria.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    2. Cunado, J. & Perez de Gracia, F., 2006. "Real convergence in Africa in the second-half of the 20th century," Journal of Economics and Business, Elsevier, vol. 58(2), pages 153-167.
    3. Chad Stroomer & David E.A. Giles, 2003. "Income Convergence and trade Openness: Fuzzy Clustering and Time Series Evidence," Econometrics Working Papers 0304, Department of Economics, University of Victoria.
    4. Ahmed Nawaz Hakro & Bashir Ahmad Fida, 2009. "Trade and Income Convergence in Selected South Asian Countries and Their Trading Partners," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 49-70, Jul-Dec.
    5. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    6. Eftychia Tsanana & Constantinos Katrakilidis, 2014. "Do Balkan economies catch up with EU? New evidence from panel unit root analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 641-662, November.
    7. Burcu Ozcan, 2014. "Does Income Converge among EU Member Countries following the Post-War Period? Evidence from the PANKPSS Test," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 22-38, October.
    8. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    9. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    10. Miguel Lebre de Freitas, 2006. "Portugal–EU Convergence Revisited: Evidence for the Period 1960–2003," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(3), pages 408-418, August.
    11. 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.
    12. Cornwell, Christopher Mark & Wächter, Jens-Uwe, 1999. "Productivity convergence and economic growth: A frontier production function approach," ZEI Working Papers B 06-1999, University of Bonn, ZEI - Center for European Integration Studies.
    13. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    14. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    15. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    16. Carlino, Gerald A. & Mills, Leonard, 1996. "Testing neoclassical convergence in regional incomes and earnings," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 565-590, December.
    17. Cunado, J. & Gil-Alana, L. A. & Perez de Gracia, F., 2004. "Real convergence in Taiwan: a fractionally integrated approach," Journal of Asian Economics, Elsevier, vol. 15(3), pages 529-547, June.
    18. Paulo M.M. Rodrigues & Jorge M. L. G. Andraz, 2015. "A Reappraisal of Eurozone Countries Output Differentials," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    19. Alejandro Diaz Bautista & Mauro Diaz Dominguez, 2004. "Capital Humano y Crecimiento Económico en México (1970-2000). Human Capital and Economic Growth in Mexico," Urban/Regional 0405008, University Library of Munich, Germany.
    20. Evans, Paul & Karras, Georgios, 1996. "Convergence revisited," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 249-265, April.

    More about this item

    Keywords

    Economic growth; international trade; convergence; common trends; cointegration; fuzzy sets; pattern recognition; fuzzy c-means algorithm;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:14:y:2005:i:1:p:93-114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.