Analysing Convergence through the Distribution Dynamics Approach: Why and how?
AbstractThe convergence hypothesis has stimulated a heated debate within the growth literature. The present paper compares the two most commonly adopted empirical approaches, the regression approach and the distribution dynamics approach, and argues that the former fails to uncover important features of the dynamics that might characterise the convergence process. Next, it provides an in depth description of the features and underlying assumptions of the distribution dynamics approach as well as a detailed discussion of some important aspects related to the estimate of stochastic kernels via kernel density estimators. Finally, the empirical section allows to emphasises the interpretational advantages stemming from the use of stochastic kernels to capture the evolution of the entire cross-sectional income distribution. Incidentally, through a comparison between the results obtained from alternative sets of Italian regions, it suggest that the use of administrative regions could lead to ambiguous results.
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Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2007_13.
Length: 40 pages
Date of creation: 2007
Date of revision:
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Distribution Dynamics; Stochastic Kernel; Kernel Density Estimation; beta-convergence; Regions;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
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