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Is Puerto Rico Converging to the United States?

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  • Fernando Lefort

Abstract

The convergence hypothesis sustains that two economics sharing the same steady-state value of per-capita income, but with different initial conditions, will tend to close the existing gap between them. In this paper I apply this concept to the case of Puerto Rico. I show that Puerto Rico is not converging to the United States, and therefore Puerto Rico cannot be sharing the same steady-state level of income of the States of the Union. After controlling for several economic variables, I show that the political status of Puerto Rico might be part of the explanation for this phenomenon.

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Bibliographic Info

Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 09.

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Date of creation: Mar 1997
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Handle: RePEc:chb:bcchwp:09

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