Have Absolute Price Levels Converged for Developed Economies? The Evidence since 1870
We compare price level and income convergence since 1870 for eleven developed economies using implicit price deflators derived from the GDP data of Maddison (1995, 2001, 2003). We find that "sigma" and "beta" convergence for prices occurs later and to a lesser extent than income. Price levels converge after 1950 while income convergence begins in the 1880s. We find no evidence for stochastic price convergence or for "club" price convergence. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Volume (Year): 90 (2008)
Issue (Month): 1 (February)
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