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A New Approach for Analysing Income Convergence across Countries

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  • O'Neill, D.

    ()
    (Economics, Finance and Accounting Dept., NUI Maynooth, Maynooth, Co. Kildare,Ireland,)

  • Van Kerm P.

    ()
    (CEPS/INSTEAD G.-D Luxembourg)

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    Abstract

    In this paper we develop a coherent framework that integrates both traditional measures of â-convergence and ó-convergence within a study of cross-country income dynamics. To do this we exploit the close links that exist between studies of income mobility and studies analysing the progressivity of the tax system. We also develop a welfare interpretation for the concept of â-convergence, which distinguishes it from the more general form of ó-convergence and which also suggests that the â-process may be worthy of independent study. We illustrate our approach using data for the period 1960-2000.

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    Bibliographic Info

    Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n1261003.

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    Length: 31 pages
    Date of creation: Oct 2003
    Date of revision:
    Handle: RePEc:may:mayecw:n1261003

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    Postal: Maynooth, Co. Kildare
    Phone: 353-1-7083728
    Fax: 353-1-7083934
    Web page: http://economics.nuim.ie
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    1. R. Bénabou & E. Ok, . "Mobility as Progressivity: Ranking Income Processes According to Equality of Opportunity," Princeton Economic Theory Papers 00f1, Economics Department, Princeton University.
    2. Bishop, John A & Formby, John P & Thistle, Paul D, 1994. "Convergence and Divergence of Regional Income Distributions and Welfare," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 228-35, May.
    3. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-19, December.
    4. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
    5. Johnson, Paul A., 2000. "A nonparametric analysis of income convergence across the US states," Economics Letters, Elsevier, vol. 69(2), pages 219-223, November.
    6. Aronson, J Richard & Johnson, Paul & Lambert, Peter J, 1994. "Redistributive Effects and Unequal Income Tax Treatment," Economic Journal, Royal Economic Society, vol. 104(423), pages 262-70, March.
    7. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-32, December.
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