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On the potential pitfalls in estimating convergence by means of pooled and panel data

Author

Listed:
  • C. Bianchi
  • M. Menegatti

Abstract

We show that the use of pooled and panel data in estimating convergence across countries (or other territorial areas) may involve some pitfalls since this type of data cannot properly distinguish between actual convergence and the possibility of decreasing growth rates over time within each country (or geographical unit). We also show how the possible bias in the estimates can be eliminated.

Suggested Citation

  • C. Bianchi & M. Menegatti, 2004. "On the potential pitfalls in estimating convergence by means of pooled and panel data," Economics Department Working Papers 2004-EP02, Department of Economics, Parma University (Italy).
    • Handle: RePEc:par:dipeco:2004-ep02
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    Cited by:

    1. Basturk, N. & Paap, R. & van Dijk, D.J.C., 2010. "Financial Development and Convergence Clubs," Econometric Institute Research Papers EI 2010-52, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. Carluccio Bianchi & Federica Calidoni & Mario Menegatti, 2009. "Pitfalls in estimating β-convergence by means of panel data: an empirical test," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 56(4), pages 347-357, December.
    3. De Siano, Rita & D'Uva, Marcella, 2009. "Regional convergence in Italy: time series approaches," MPRA Paper 20397, University Library of Munich, Germany.

    More about this item

    Keywords

    Convergence; growth; panel data; pooling;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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