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Τesting convergence and divergence: the data from Greece

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  • Mavroudeas, Stavros
  • Siriopoulos, Costas

Abstract

The convergence hypothesis is a popular tenet in modern discussions in macroeconomics and regional economics. It derives from the very fundamental properties of the neoclassical single-sector growth model, and its assumption of diminishing returns to scale. Following this theoretical framework a number of empirical tests (σ or unconditional β or conditional β-convergence) has been developed. This paper tests unconditional and conditional β-convergence for the Greek economy. Three issues are being considered: (i)if there is regional convergence, (ii) if there is a North-Southern divide, (iii) if Greece is converging with the other economies taking part in the European integration project. Our empirical results reject the convergence hypothesis in all cases. These findings, together with similar findings for many other economies, pose significant problems for the theoretical assumptions of the neoclassical growth model with exogenous technical change.

Suggested Citation

  • Mavroudeas, Stavros & Siriopoulos, Costas, 1998. "Τesting convergence and divergence: the data from Greece," MPRA Paper 17170, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17170
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    References listed on IDEAS

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    1. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
      • Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
      • Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Convergence," Scholarly Articles 3451299, Harvard University Department of Economics.
    2. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    3. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    4. Button, Kenneth J & Pentecost, Eric J, 1995. "Testing for Convergence of the EU Regional Economies," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 664-671, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Georgios Kontogeorgis & Nikolaos Varotsis, 2021. "Reinstating Greek E-Governance: A Framework For E-Government Benchmarking, Improvement And Government Policies," Public administration issues, Higher School of Economics, issue 6, pages 103-127.
    2. Mavroudeas, Stavros D., 2015. "The Greek saga: competing explanations of the Greek crisis," Economics Discussion Papers 2015-1, School of Economics, Kingston University London.

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    More about this item

    Keywords

    convergence; neoclassical theory; Greece;
    All these keywords.

    JEL classification:

    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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