The Mirage of Convergence: Why Poor Countries May Only Seem to Be Closing the Income Gap
AbstractResults of numerous cross-country growth regressions have been found to be sensitive to specification, time period or sample coverage. Several authors have observed that results may depend on the source and data collection methods for right-hand side variables. In this paper we suggest that a more fundamental problem may exist with respect to the growth rates used in the majority of studies. Differences in measured growth rates are severe across widely-used sources. More critically, these differences are correlated with countries’ level of development. As an illustration, we show that the results of two recent studies depend critically on which data set is used to derive the growth measure.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp222.
Date of creation: Oct 2004
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Growth; Measurement; Developing Economies.;
Other versions of this item:
- Filer, Randall K & Hajkova, Dana & Hanousek, Jan, 2004. "The Mirage of Convergence: Why Poor Countries May Only Seem to Be Closing the Income Gap," CEPR Discussion Papers 4349, C.E.P.R. Discussion Papers.
- C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
- Alexandr Cerny & Randall K. Filer, 2007. "Natural Resources: Are They Really a Curse?," CERGE-EI Working Papers wp321, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
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