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Heterogeneous Convergence

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Author Info
Young, Andrew
Higgins, Matthew
Levy, Daniel

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Abstract

We use US county-level data containing 3,058 cross-sectional observations and 41 conditioning variables to study economic growth and explore possible heterogeneity in growth determination across 32 individual states. Using a 3SLS-IV estimation method, we find that the convergence rates for 32 individual states are above 2 percent, with an average of 8.1 percent. For 7 states the convergence rate can be rejected as identical to at least one other state’s convergence rate with 95 percent confidence. Convergence rates are negatively correlated with initial income. The size of government at all levels of decentralization is either unproductive or negatively correlated with growth. Educational attainment has a non-linear relationship with growth. The size of the finance, insurance and real estate, and entertainment industries are positively correlated with growth, while the size of the education industry is negatively correlated with growth. Heterogeneity in the effects of balanced growth path determinants across individual states is harder to detect than in convergence rates.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 954.

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Date of creation: 25 Oct 2006
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Handle: RePEc:pra:mprapa:954

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Related research
Keywords: Economic Growth; Conditional Convergence; County Level Data;

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Find related papers by JEL classification:
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Young, Andrew & Higgins, Matthew & Levy, Daniel, 2007. "Black Populations and Economic Growth: An Extreme Bounds Analysis of Mississippi County-Level Data," MPRA Paper 1646, University Library of Munich, Germany. [Downloadable!]
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  2. Higgins, Matthew & Young, Andrew & Levy, Daniel, 2007. "Robust Correlates of County-Level Growth in the U.S," MPRA Paper 3088, University Library of Munich, Germany. [Downloadable!]
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  3. Young, Andrew & Higgins, Matthew & Levy, Daniel, 2007. "Sigma Convergence versus Beta Convergence: Evidence from U.S. County-Level Data," MPRA Paper 2714, University Library of Munich, Germany. [Downloadable!]
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