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Structural Breaks and Convergence in the Regions of Peru: 1970–2010

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  • Augusto Delgado
  • Gabriel Rodríguez

Abstract

The aim of this paper is the analysis of stochastic and β-convergence in the relative regional per capita outputs using different unit root tests both with and without structural breaks and using a further test that is robust to the presence of I(0) or I(1) errors. It allows robust inference on the estimates of the initial per capita output (intercepts) and the respective growth rates (slopes). The results of the application of unit root tests without structural breaks show the absence of stochastic convergence. However, by incorporating the presence of endogenous breaks, the results are reversed for all regions. In the case of β-convergence, the results of the robust test W RQF show that all regions have a structural break at some point during the period 1970–2010. We find different behavior for different regions. There is a catching-up process and a lagging-behind process for different groups of regions towards more negative or more positive paths.

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  • Augusto Delgado & Gabriel Rodríguez, 2015. "Structural Breaks and Convergence in the Regions of Peru: 1970–2010," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 346-357, May.
    • Handle: RePEc:bla:rdevec:v:19:y:2015:i:2:p:346-357
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    File URL: http://hdl.handle.net/10.1111/rode.12146
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    Cited by:

    1. Delgado Narro, Augusto Ricardo, 2020. "The Process of Convergence among the Japanese Prefectures: 1955 - 2012," MPRA Paper 100361, University Library of Munich, Germany.
    2. Gabriel Rodríguez & Juan Palomino, 2019. "Peru's Regional Growth and Convergence in 1979-2017: An Empirical Spatial Panel Data Analysis," Documentos de Trabajo / Working Papers 2019-478, Departamento de Economía - Pontificia Universidad Católica del Perú.

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