IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa02p024.html
   My bibliography  Save this paper

Markov or not Markov - this should be a question

Author

Listed:
  • Bode, Eckhardt
  • Bickenbach, Frank

Abstract

Although it is well known that Markov process theory, frequently applied in the literature on income convergence, imposes some very restrictive assumptions upon the data generating process, these assumptions have generally been taken for granted so far. The present paper proposes, resp. recalls chi-square tests of the Markov property, of spatial independence, and of homogeneity across time and space to assess the reliability of estimated Markov transition matrices. As an illustration we show that the evolution of the income distribution across the 48 coterminous U.S. states from 1929 to 2000 clearly has not followed a Markov process.

Suggested Citation

  • Bode, Eckhardt & Bickenbach, Frank, 2002. "Markov or not Markov - this should be a question," ERSA conference papers ersa02p024, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa02p024
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa02/cd-rom/papers/024.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," The World Bank Economic Review, World Bank, vol. 14(1), pages 17-47, January.
    2. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
    3. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, March.
    4. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    5. Bernard Fingleton, 2000. "Convergence: International comparisons based on a simultaneous equation model with regional effects," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(3), pages 285-305.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    7. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-2132, December.
    8. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    9. Bode, Eckhardt, 2001. "Is regional innovative activity path-dependent? An empirical analysis for Germany," Kiel Working Papers 1058, Kiel Institute for the World Economy (IfW Kiel).
    10. Costas Megir & Danny Quah, 1996. "Regional Convergence Clusters Across Europe," CEP Discussion Papers dp0274, Centre for Economic Performance, LSE.
    11. de la Fuente, Angel, 1997. "The empirics of growth and convergence: A selective review," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 23-73, January.
    12. Sergio J. Rey, 2001. "Spatial Dependence in the Evolution of Regional Income Distributions," Urban/Regional 0105001, University Library of Munich, Germany.
    13. Loewy, Michael B. & Papell, David H., 1996. "Are U.S. regional incomes converging? Some further evidence," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 587-598, December.
    14. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    15. Fingleton, B & McCombie, J S L, 1998. "Increasing Returns and Economic Growth: Some Evidence for Manufacturing from the European Union Regions," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 89-105, January.
    16. Fingleton, Bernard, 1997. "Specification and Testing of Markov Chain Models: An Application to Convergence in the European Union," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(3), pages 385-403, August.
    17. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    18. Bulli, Sandra, 2001. "Distribution Dynamics and Cross-Country Convergence: A New Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(2), pages 226-243, May.
    19. Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
    20. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    21. Bode, Eckhardt, 1998. "Lokale Wissensdiffusion und regionale Divergenz in Deutschland," Open Access Publications from Kiel Institute for the World Economy 1038, Kiel Institute for the World Economy (IfW Kiel).
    22. Carlino, Gerald A. & Mills, Leonard O., 1993. "Are U.S. regional incomes converging? : A time series analysis," Journal of Monetary Economics, Elsevier, vol. 32(2), pages 335-346, November.
    23. Quah, Danny, 1993. " Galton's Fallacy and Tests of the Convergence Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 427-443, December.
    24. Magrini, Stefano, 1999. "The evolution of income disparities among the regions of the European Union," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 257-281, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frank Bickenbach & Eckhardt Bode, 2003. "Evaluating the Markov Property in Studies of Economic Convergence," International Regional Science Review, , vol. 26(3), pages 363-392, July.
    2. Le Pen, Yannick, 2011. "A pair-wise approach to output convergence between European regions," Economic Modelling, Elsevier, vol. 28(3), pages 955-964, May.
    3. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    4. Sergio J. Rey & Mark V. Janikas, 2003. "Convergence and space," Urban/Regional 0311002, University Library of Munich, Germany, revised 16 Nov 2003.
    5. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
    6. Maarten Bosker & Waldo Krugell, 2008. "Regional Income Evolution In South Africa After Apartheid," Journal of Regional Science, Wiley Blackwell, vol. 48(3), pages 493-523, August.
    7. Julie Le Gallo, 2004. "Space-Time Analysis of GDP Disparities among European Regions: A Markov Chains Approach," International Regional Science Review, , vol. 27(2), pages 138-163, April.
    8. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    9. Eckey, Hans-Friedrich & Türck, Matthias, 2005. "Convergence of EU-regions: A literature report," Volkswirtschaftliche Diskussionsbeiträge 80, University of Kassel, Faculty of Economics and Management.
    10. Maurseth, Per Botolf, 2001. "Convergence, geography and technology," Structural Change and Economic Dynamics, Elsevier, vol. 12(3), pages 247-276, September.
    11. Enrico Fabrizi & Gianni Guastella & Stefano Marta & Francesco Timpano, 2016. "Determinants of Intra-Distribution Dynamics in European Regions: An Empirical Assessment of the Role of Structural Intervention," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(5), pages 522-539, December.
    12. Maarten Bosker, 2009. "The spatial evolution of regional GDP disparities in the ‘old’ and the ‘new’ Europe," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 3-27, March.
    13. Ezcurra, Roberto, 2007. "Is there cross-country convergence in carbon dioxide emissions?," Energy Policy, Elsevier, vol. 35(2), pages 1363-1372, February.
    14. Henryk Gurgul & Łukasz Lach, 2019. "Regional patterns in technological progress of Poland: the role of EU structural funds," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(4), pages 1195-1220, December.
    15. Eckey, Hans-Friedrich & Türck, Matthias, 2007. "Convergence of EU-Regions. A Literature Report," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 10, pages 5-32.
    16. Jesús Peiró-Palomino & William Orlando Prieto-Bustos & Emili Tortosa-Ausina, 2020. "Weighted convergence in Colombian departments: The role of geography and demography," Working Papers 2020/01, Economics Department, Universitat Jaume I, Castellón (Spain).
    17. Völlmecke, Dominik & Jindra, Björn & Marek, Philipp, 2016. "FDI, human capital and income convergence—Evidence for European regions," Economic Systems, Elsevier, vol. 40(2), pages 288-307.
    18. Jesús Peiró-Palomino, 2013. "European regional convergence revisited: The role of space and the intangible assets," Working Papers 2013/11, Economics Department, Universitat Jaume I, Castellón (Spain).
    19. Sheila Chapman & Stefania Cosci & Loredana Mirra, 2012. "Income dynamics in an enlarged Europe: the role of capital regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 663-693, June.
    20. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).

    More about this item

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa02p024. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.