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The long wave of conditional convergence

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  • Tong, Jian

Abstract

We calculate the time series of the speed of convergence for 21 high-income countries over the period: 1953-1996, using low-pass filtered time series of per-capita GDP which are thus isolated from the influence of the short-run business cycle components. The observed patterns contradict the conventional ‘time-invariant speed of convergence’ hypothesis. Furthermore, dynamic panel data analysis provides strong evidence of the existence of stationary long cycles in the per capita GDP time series. We develop and estimate a technology-diffusion-based endogenous growth model, which shows that the endogenous growth of the domestic knowledge stock can account for the long cycles observed in the data. Keywords; trend reversion, speed of convergence, growth cycles

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Paper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 0614.

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Date of creation: 03 Oct 2006
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Handle: RePEc:stn:sotoec:0614

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