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Income Convergence and trade Openness: Fuzzy Clustering and Time Series Evidence

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Author Info
Chad Stroomer () (Department of Economics, University of Victoria)
David E.A. Giles () (Department of Economics, University of Victoria)

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Abstract

In the now extensive literature on the convergence of per capita income (output) across countries over time, there is surprisingly little attention paid to the role of international trade in goods and services. Some more recent studies have illustrated that standard trade theories provide no clear prediction as to the impact of trade liberalization on output convergence. These studies have also provided somewhat ambiguous empirical evidence regarding this relationship, under-scoring the need for additional results in this area. This paper uses both standard and new approaches to testing for convergence in order to explore the extent to which the degree of trade openness may affect output convergence among countries. Using annual time-series data for 88 countries from the Penn World Tables, we obtain somewhat mixed results, but on balance they are quite supportive of a positive relationship (though not necessarily causality) between trade openness and income convergence. These results also suggest certain directions that further research might take in order to shed more light on this important issue.

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Publisher Info
Paper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number 0304.

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Length: 29 pages
Date of creation: 07 May 2003
Date of revision:
Handle: RePEc:vic:vicewp:0304

Note: ISSN 1485-6441
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Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2
Phone: (250)721-8540
Fax: (250)721-6214
Web page: http://web.uvic.ca/econ
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Related research
Keywords: Openness; international trade; output convergence; economic growth; time-series; fuzzy clustering;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
F15 - International Economics - - Trade - - - Economic Integration
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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References listed on IDEAS
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.:
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Full references

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. David Giles & Chad Stroomer, 2006. "Does Trade Openness Affect the Speed of Output Convergence? Some Empirical Evidence," Empirical Economics, Springer, vol. 31(4), pages 883-903, November. [Downloadable!] (restricted)
    Other versions:
  2. Antonio Morillas & Bárbara Díaz, 2005. "Qualitative Answering Surveys And Soft Computing," GE, Growth, Math methods 0512002, EconWPA. [Downloadable!]
    Other versions:
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