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Stochastic convergence among European economies

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Author Info

  • Mauro Costantini

    ()
    (University of Rome and ISAE)

  • Claudio Lupi

    ()
    (University of Molise)

Abstract

The aim of this paper is to test the stochastic convergence in real per capita GDP for 15 European countries using non-stationary panel data approaches over the period 1950-2003. Cross-sectional dependence is assumed due to the existence of strong linkages among European economies. However, tests derived under the assumption of cross-sectional independence are also carried out for completeness and comparison. We also split the whole sample into two sub-periods (1950-1976, 1977-2003) in order to take into account the effects of the first oil crisis (1973-1974) and to evaluate the robustness of the statistical analysis. Our results offer little support to the stochastic convergence hypothesis for the whole period, while suggest the presence of convergence in the first sub-period.

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File URL: http://www.accessecon.com/pubs/EB/2005/Volume3/EB-05C30008A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 3 (2005)
Issue (Month): 38 ()
Pages: 1-17

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Handle: RePEc:ebl:ecbull:eb-05c30008

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Keywords: Convergence;

References

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  10. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
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  12. Peter C.B. Phillips & Donggyu Sul, 2003. "The Elusive Empirical Shadow of Growth Convergence," Cowles Foundation Discussion Papers 1398, Cowles Foundation for Research in Economics, Yale University.
  13. Bernard, A.B. & Jones, C.I., 1993. "Productivity Across Industries and Countries: Time Series Theory and Evidence," Working papers 93-17, Massachusetts Institute of Technology (MIT), Department of Economics.
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  15. Durlauf,S.N., 2003. "The convergence hypothesis after 10 years," Working papers 6, Wisconsin Madison - Social Systems.
  16. Evans, Paul & Karras, Georgios, 1996. "Convergence revisited," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 249-265, April.
  17. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
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