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Technological differences and convergence in the OECD

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  • Javier Andrés

    ()
    (University of Valencia, Departamento de Análisis Económico, Avda. dels Tarongers s/n, E-46022 Valencia, Spain)

  • José E. Boscá

    ()
    (University of Valencia, Departamento de Análisis Económico, Avda. dels Tarongers s/n, E-46022 Valencia, Spain)

Abstract

In this paper we test the homogeneity of the technological parameters among OECD countries, which is the maintained hypothesis in most of the empirical growth literature. We first identify differences in the constant term of the convergence equation estimated for the OECD 1960/1990 sample using a fixed- effects estimator. Then we provide a formal test of the homogeneity of technological parameters across groups of countries. We identify at least two different groups within the OECD, with significantly different technologies. Convergence within each group is fast, supporting the notion of club convergence. Nevertheless, the implausible parameter values obtained for the leading technology club casts some doubts on the validity of the Solow model to account for the long run behaviour of this group of countries.

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Bibliographic Info

Article provided by Springer in its journal Spanish Economic Review.

Volume (Year): 2 (2000)
Issue (Month): 1 ()
Pages: 11-27

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Handle: RePEc:spr:specre:v:2:y:2000:i:1:p:11-27

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Related research

Keywords: Growth; convergence clubs; technological parameters;

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References

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  1. Antonio Ciccone & Kiminori Matsuyama, 1995. "Start-up costs and pecuniary externalities as barriers to economic development," Economics Working Papers 142, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Dowrick, Steve & Nguyen, Duc-Tho, 1989. "OECD Comparative Economic Growth 1950-85: Catch-Up and Convergence," American Economic Review, American Economic Association, vol. 79(5), pages 1010-30, December.
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  6. Charles I. Jones, . "Convergence Revisited," Working Papers 96006, Stanford University, Department of Economics.
  7. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
  8. Danny Quah, 1992. "Empirical cross-section dynamics in economic growth," Discussion Paper / Institute for Empirical Macroeconomics 75, Federal Reserve Bank of Minneapolis.
  9. F Zilibotti, 1993. "A Rostovian Model of Endogenous Growth and Underdevelopment Traps," CEP Discussion Papers dp0166, Centre for Economic Performance, LSE.
  10. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," CEPR Discussion Papers 1350, C.E.P.R. Discussion Papers.
  11. 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 365-84, Oct.-Dec..
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  13. Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers.
  14. James Harrigan, 1997. "Estimation of Cross-Country Differences in Industry," NBER Working Papers 6121, National Bureau of Economic Research, Inc.
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Cited by:
  1. Nevin Cavusoglu & Edinaldo Tebaldi, 2006. "Evaluating growth theories and their empirical support: An assessment of the convergence hypothesis," Journal of Economic Methodology, Taylor & Francis Journals, vol. 13(1), pages 49-75.

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