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Nonlinearities in economic growth and club convergence

  • Rosa Bernardini Papalia

    ()

  • Silvia Bertarelli

    ()

This paper deals with heterogeneity and nonlinearities in the growth process by developing a two-stage strategy to identify and estimate a club convergence model with threshold externalities. Because of identification and collinearity problems, we develop an entropy-based estimation procedure which simultaneously takes account of ill-posed and ill-conditioned inference problems. First, clubs are identified by introducing a mapping structure in a conditional convergence model. Finally, we estimate a multiple club convergence model, where clubs correspond to subsets of total observations. Our procedure is applied to assess the existence of club convergence for a large sample of countries (1965–2008). Copyright Springer-Verlag 2013

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File URL: http://hdl.handle.net/10.1007/s00181-012-0568-2
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Article provided by Springer in its journal Empirical Economics.

Volume (Year): 44 (2013)
Issue (Month): 3 (June)
Pages: 1171-1202

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Handle: RePEc:spr:empeco:v:44:y:2013:i:3:p:1171-1202
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