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A Nonlinear Empirical Test on the Stochastic Convergence of Economic Growth: A Case Study of East Asian Economic Community

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  • Wang Kun
  • An Na

Abstract

In this paper we use the nonlinear unit root test and the replacement residual sampling, i.e. the Bootstrap method, to analyze the relative dynamic growth of GDP per capita between China and EAEC countries, observe the stochastic convergence of economy, and further divide the convergence into the long-term convergence and process convergence. The empirical results show that: compared with China, all EAEC countries¡¯ per capital output gap is characterized by the nonlinear time series and the majority of countries¡¯ in the nonlinear convergence. This gives a new perspective for the market-guided economic integration planning development, as well as reducing regional disparities.

Suggested Citation

  • Wang Kun & An Na, 2016. "A Nonlinear Empirical Test on the Stochastic Convergence of Economic Growth: A Case Study of East Asian Economic Community," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(10), pages 103-109, October.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:10:p:103-109
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    References listed on IDEAS

    as
    1. Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
    2. Lee Kian Lim & Michael McAleer, 2004. "Convergence and catching up in ASEAN: a comparative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 137-153.
    3. Les Oxley & David Greasley, 1995. "A Time‐Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(3), pages 259-270, September.
    4. Oxley, Les & Greasley, David, 1995. "A Time-Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(214), pages 259-270, September.
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    More about this item

    Keywords

    stochastic convergence; nonlinear; East Asian Economic Community (EAEC);
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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