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Comparing the Speed of Convergence in American Integration Areas

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  • Sperlich, Y.

Abstract

Economic growth theory predicts more success for North-South than for South-South agreements. We compare the speed of convergence of the North-South area NAFTA with that of the South-South area SICA and the one of the MERCOSUR. We apply GSL fixed effects and a random effects regression with the Mundlak device, respectively, both with an AR(1) errors. The results indicate that Southern agreement areas clearly converge faster, whereas the within-convergence is faster for NAFTA. But when looking at the confidence intervals, it is shown that the absolute information value of the area-specific speed of convergence is rather limited.

Suggested Citation

  • Sperlich, Y., 2013. "Comparing the Speed of Convergence in American Integration Areas," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 77-88.
    • Handle: RePEc:eaa:aeinde:v:13:y:2013:i:1_7
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    References listed on IDEAS

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    More about this item

    Keywords

    regional integration; speed of convergence; Latin America; NAFTA; MERCOSUR; CAIS; free trade areas; economic development.;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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