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Les provinces canadiennes et la convergence : une evaluation empirique

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  • Mario Lefebvre

    (Bank of Canada)

Abstract

This paper examines whether the hypothesis of economic convergence holds for the Canadian provinces. Using data on real gross domestic product per capita and on factor productivity from 1966 to 1992, the paper shows, using two different methods, that the convergence hypothesis cannot be rejected. This evidence supports the findings of other authors who have studied convergence among Canadian provinces. The first method estimates the relationship between the average growth rate in real per capita GDP and its initial level. In part because of the classic problem of regression towards the mean, it has been argued that this method is not suitable for testing the convergence hypothesis. The second method examines the trend in gaps in real per capita GDP and productivity between the richest provinces and the other provinces. It is the use of this method that distinguishes our work from previous studies, since it allows us not only to avoid some of the criticisms mentioned above, but also to examine developments in each province separately. Cette etude a pour but de determiner si l'hypothese de convergence economique s'applique aux provinces canadiennes. En utilisant les donnees du produit interieur brut reel par habitant et de la productivite des facteurs de production entre 1966 et 1992, l'etude montre, a l'aide de deux methodes distinctes, que l'on ne peut rejeter cette hypothese. Ce resultat confirme les conclusions auxquelles sont parvenus d'autres auteurs qui ont examine le phenomene de la convergence entre les provinces canadiennes. La premiere methode utilisee consiste a estimer la relation qui existe entre la croissance moyenne et le niveau initial du PIB reel par habitant. Se fondant entre autres sur le probleme classique du retour a la moyenne, certains chercheurs ont reproche a cette methode de ne pas tester adequatement l'hypothese de la convergence. La deuxieme methode, quant a elle, consiste a examiner la tendance des ecarts observes entre, d'une part, le niveau du PIB reel par habitant et de la productivite dans les provinces les plus riches et, d'autre part, le niveau de chacune de ces deux variables dans les autres provinces. L'etude se distingue de celles qui ont ete realisees jusqu'ici sur le sujet par l'utilisation de la deuxieme methode, qui, en plus de contourner les critiques mentionnees ci-dessus, nous a permis d'examiner separement le comportement de chaque province.

Suggested Citation

  • Mario Lefebvre, "undated". "Les provinces canadiennes et la convergence : une evaluation empirique," Staff Working Papers 94-10, Bank of Canada.
  • Handle: RePEc:bca:bocawp:94-10
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    References listed on IDEAS

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    1. John F. Helliwell, 1996. "Convergence and Migration among Provinces," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 324-330, April.
    2. Andrew B. Bernard & Steven N. Durlauf, 1991. "Convergence of International Output Movements," NBER Working Papers 3717, National Bureau of Economic Research, Inc.
    3. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    4. repec:fth:harver:1532 is not listed on IDEAS
    5. Quah, Danny, 1993. " Galton's Fallacy and Tests of the Convergence Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 427-443, December.
    6. Baumol, William J & Wolff, Edward N, 1988. "Productivity Growth, Convergence, and Welfare: Reply," American Economic Review, American Economic Association, vol. 78(5), pages 1155-1159, December.
    7. Dowrick, Steve & Nguyen, Duc-Tho, 1989. "OECD Comparative Economic Growth 1950-85: Catch-Up and Convergence," American Economic Review, American Economic Association, vol. 79(5), pages 1010-1030, December.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Marvin McInnis, 1968. "The Trend of Regional Income Differentials in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 1(2), pages 440-470, May.
    10. 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 1072-1085, December.
    11. 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.
    12. Carlino, Gerald & Mills, Leonard, 1996. "Are U.S. regional incomes converging? Reply," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 599-601, December.
    13. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-2132, December.
    14. Robert J. Barro & Xavier Sala-i-Martin, 1990. "Economic Growth and Convergence across The United States," NBER Working Papers 3419, National Bureau of Economic Research, Inc.
    15. Coulombe, S. & Lee, F.C., 1993. "Regional Economic Disparities in Canada," Working Papers 9317e, University of Ottawa, Department of Economics.
    16. Lee, F.C. & Coulombe, S., 1993. "Regional Productivity Convergence in Canada," Working Papers 9318e, University of Ottawa, Department of Economics.
    17. Oulton,Nicholas & O'Mahony,Mary, 1994. "Productivity and Growth," Cambridge Books, Cambridge University Press, number 9780521453455, March.
    18. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    19. Gerald A. Carlino & Leonard O. Mills, 1990. "Persistence and convergence in relative regional incomes," Working Papers 90-23, Federal Reserve Bank of Philadelphia.
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    Cited by:

    1. Lefebvre, M. & Poloz, S.S., 1996. "The Commodity-Price Cycle and Regional Economic Performance in Canada," Staff Working Papers 96-12, Bank of Canada.
    2. Mario Lefebvre, 1997. "Les marchés du travail régionaux : une comparaison entre le Canada et les États-Unis," Staff Working Papers 97-17, Bank of Canada.
    3. Serge Coulombe, 2000. "New Evidence of Convergence Across Canadian Provinces: The Role of Urbanization," Regional Studies, Taylor & Francis Journals, vol. 34(8), pages 713-725.

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