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Regional Convergence in Latin America

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Author Info

  • Bennett Sutton
  • Genevieve Lindow
  • Maria Isabel Serra
  • Gustavo Ramirez
  • Maria Fernanda Pazmino
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    Abstract

    This paper presents empirical evidence on convergence of per capita output for regions within six large middle-income Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. It explores the role played by several exogenous sectoral shocks and differences in steady states within each country. It finds that poor and rich regions within each country converged at very low rates over the past three decades. It also finds evidence of regional "convergence clubs" within Brazil and Peru- the estimated speeds of convergence for these countries more than double after controlling for different subnational levels of steady state. For the latter countries and Chile, convergence is also higher after controlling for sector-specific shocks. Finally, results show that national disparities in per capita output increased temporarily after each country pursued trade liberalization.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/125.

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    Length: 29
    Date of creation: 01 May 2006
    Date of revision:
    Handle: RePEc:imf:imfwpa:06/125

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    Related research

    Keywords: Economic growth; Latin America; Productivity; Production; standard deviation; trade liberalization; conditional convergence; equation; correlation; sample size; evidence of convergence; dummy variables; import substitution; oil prices; global trade; evidence of ? convergence; export industries; convergence analysis; international trade; per capita income; heteroscedasticity; political economy; foreign ownership; impact of trade liberalization; income convergence; liberalizing trade; independent variable; rate of change; regression equation; tariff barriers; domestic consumption; balance of payments crisis; impact of trade; statistical significance; exchange rate regime; non-tariff barriers; economic convergence; balance of payments; trade reforms; import substitution policies; import tariffs;

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    References

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    1. Xavier Sala-i-Martin, 1995. "The classical approach to convergence analysis," Economics Working Papers 117, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Roberto Duncan & J. Rodrigo Fuentes, 2005. "Convergencia Regional en Chile: Nuevos Tests, Viejos Resultados," Working Papers Central Bank of Chile 313, Central Bank of Chile.
    3. Paul Cashin & Ratna Sahay, 1995. "Internal Migration, Center-State Grants and Economic Growth in the States of India," IMF Working Papers 95/66, International Monetary Fund.
    4. Daniel da Mata & Uwe Deichmann & J. Vernon Henderson & Somik V. Lall & Hyoung G. Wang, 2005. "Examining the Growth Patterns of Brazilian Cities," Discussion Papers 1113, Instituto de Pesquisa Econômica Aplicada - IPEA.
    5. Ricardo Adrogué & Martin Cerisola & Gaston Gelos, 2006. "Brazil's Long-Term Growth Performance," IMF Working Papers 06/282, International Monetary Fund.
    6. Juan David Barón & Gerson Javier Pérez & Peter Rowland, 2004. "A Regional Economic Policy For Colombia," BORRADORES DE ECONOMIA 001931, BANCO DE LA REPÚBLICA.
    7. Chiquiar, Daniel, 2005. "Why Mexico's regional income convergence broke down," Journal of Development Economics, Elsevier, vol. 77(1), pages 257-275, June.
    8. Raimundo Soto & Arístides Torche, 2004. "Spatial Inequality, Migration and Economic Growth in Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(124), pages 401-424.
    9. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    10. Jahangir Aziz & Christoph Duenwald, 2001. "China's Provincial Growth Dynamics," Development and Comp Systems 0012004, EconWPA.
    11. Ferreira, Pedro Cavalcanti Gomes & Ellery Junior, Roberto de Góes, 1995. "Convergência Entre A Renda Per-Capita dos Estados Brasileiros," Economics Working Papers (Ensaios Economicos da EPGE) 255, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    12. Jahangir Aziz & Christoph Duenwald, 2001. "China's Provincial Growth Dynamics," IMF Working Papers 01/3, International Monetary Fund.
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    Citations

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    Cited by:
    1. Brida, Juan Gabriel & London, Silvia & Rojas, Mara, 2012. "Convergencia interregional en dinámica de regimenes: el caso del Mercosur
      [Regional convergence of dynamic of regimens: the case of Mercosur]
      ," MPRA Paper 36863, University Library of Munich, Germany.
    2. Breinlich, Holger & Ottaviano, Gianmarco & Temple, Jonathan, 2013. "Regional Growth and Regional Decline," CEPR Discussion Papers 9568, C.E.P.R. Discussion Papers.
    3. Brida, Juan Gabriel & London, Silvia & Rojas, Mara, 2013. "Una aplicación de los árboles de expansión mínima y árboles jerárquicos al estudio de la convergencia interregional en dinámica de regímenes || An Application of Minimum Spanning Trees and Hie," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 15(1), pages 3-28, June.
    4. International Monetary Fund, 2010. "Post-Crisis Bank Behavior," IMF Working Papers 10/1, International Monetary Fund.
    5. Anoop Singh & Martin D. Cerisola, 2006. "Sustaining Latin America's Resurgence," IMF Working Papers 06/252, International Monetary Fund.

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