Regime-Dependent output convergence in Latin America
This paper test for long-run output convergence between a sample of eight Latin American countries and over the study period 1900-2003. The key contribution of this paper is in term of the econometric methodology where non-stationarity of log real per capita income differentials is tested within a Markov regime-switching framework. In contrast to existing studies, this paper defines two new concepts of output convergence where one allows for the possibility that output differentials behaviour either switches between stationary and non-stationary regimes (partial convergence), or switches between stationary regimes characterised by differing degrees of persistence (varied convergence). Whereas standard univariate and panel data unit root testing clearly suggest that output differentials are non-stationary, employment of the regime-switching methodology indicates that most of the sample is characterised by the existence of two distinct stationary regimes. Furthermore, it is argued that the often-cit
Volume (Year): 33 (2006)
Issue (Month): 1 Year 2006 (June)
|Contact details of provider:|| Web page: http://www.econ.uchile.cl/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernard, A.B. & Durlauf, S.N., 1993.
"Convergence in International Output,"
93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
- Yin-Wong Cheung & Antonio I. Garcia Pascual, 2000.
"Testing for Output Convergence: A Re-Examination,"
CESifo Working Paper Series
319, CESifo Group Munich.
- Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
- Bruce E. Hansen, 1996.
"Sample Splitting and Threshold Estimation,"
Boston College Working Papers in Economics
319., Boston College Department of Economics, revised 12 May 1998.
- Andrew B. Bernard & Steven N. Durlauf, 1994.
"Interpreting Tests of the Convergence Hypothesis,"
NBER Technical Working Papers
0159, National Bureau of Economic Research, Inc.
- S. Dobson & C. Ramlogan, 2002. "Economic Growth and Convergence in Latin America," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 83-104.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 107(2), pages 407-437.
- Mohsin S. Khan & Manmohan S. Kumar, 1993. "Public and Private Investment and the Convergence of Per Capita Incomes in Developing Countries," IMF Working Papers 93/51, International Monetary Fund.
- Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002.
"Unit root tests in panel data: asymptotic and finite-sample properties,"
Journal of Econometrics,
Elsevier, vol. 108(1), pages 1-24, May.
- Tom Doan, . "LEVINLIN: RATS procedure to perform Levin-Lin-Chu test for unit roots in panel data," Statistical Software Components RTS00242, Boston College Department of Economics.
- Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- R. Nagaraj & A. Varoudakis & M.-A. Véganzonès, 2000.
"Long-run growth trends and convergence across Indian States,"
Journal of International Development,
John Wiley & Sons, Ltd., vol. 12(1), pages 45-70.
- Rayaprolu Nagaraj & Aristomène Varoudakis & Marie-Ange Véganzonès, 1998. "Long-Run Growth Trends and Convergence Across Indian States," OECD Development Centre Working Papers 131, OECD Publishing.
- Paul Evans, 1997. "How Fast Do Economies Converge?," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 219-225, May.
- Chumacero Rómulo A., 2006. "On the Power of Absolute Convergence Tests," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 10(2), pages 1-25, May.
- Kaddour Hadri, 2000.
"Testing for stationarity in heterogeneous panel data,"
Royal Economic Society, vol. 3(2), pages 148-161.
- Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
- Tom Doan, . "HADRI: RATS procedure to implement Hadri test for unit roots in panel data," Statistical Software Components RTS00084, Boston College Department of Economics.
- Chumacero, Romulo A. & Fuentes, J. Rodrigo, 2006. "Chilean growth dynamics," Economic Modelling, Elsevier, vol. 23(2), pages 197-214, March.
- Afonso Ferreira, 2000. "Convergence in Brazil: recent trends and long-run prospects," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 479-489.
- Phillips, P. C. B. & Ouliaris, S., 1988. "Testing for cointegration using principal components methods," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 205-230.
- Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
When requesting a correction, please mention this item's handle: RePEc:udc:esteco:v:33:y:2006:i:1:p:65-81. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Verónica Kunze)
If references are entirely missing, you can add them using this form.