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Are income differences within the OECD diminishing? Evidence from Fourier unit root tests

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  • King Alan

    (Department of Economics, University of Otago, New Zealand)

  • Ramlogan-Dobson Carlyn

    (University of Hull, Hull Business School, Hull, UK)

Abstract

We investigate the income convergence hypothesis for 24 OECD countries using Fourier-type unit root tests that can account for structural breaks of unknown number, timing and functional form in a series’ data generating process. Our results indicate that all 24 countries have followed a nonlinear underlying growth path (relative to the US) over the post-war era. These growth paths indicate that as many as half of the countries sampled are systematically catching-up with the US. Only a handful show evidence of being in relative decline, but the fact that this group includes several G7 economies is of concern.

Suggested Citation

  • King Alan & Ramlogan-Dobson Carlyn, 2014. "Are income differences within the OECD diminishing? Evidence from Fourier unit root tests," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 18(2), pages 1-15, April.
    • Handle: RePEc:bpj:sndecm:v:18:y:2014:i:2:p:15:n:4
    DOI: 10.1515/snde-2013-0008
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