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Empirics for Economic Growth and Convergence

  • Danny Quah
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    The convergence hypotehsis has genreated a huge empriical literature: this paper critically reviews some of the earlier key findings, clarifies their implications, and relates thme to more recent results. Particular attention is devoted to interpreting convergence empirics. The mian finding s are: (1) The much-heralded uniform 2% rate of convergence could arise for reasons unrelated to the dynamics of economic growth (2) Usual empirical analyses- cross section (conditional) convergence regressions, time series modelling, panel data analysis - can be misleading for understanding convergence; a model polarization in economic growth clarifies these difficulties. (3) The data, more revealingly modelled, show persistence and immobility across countries: some evidence supprots Baumol's ideal of "convergence clubs"; some evidence shows the poor getting poorer, and the rich richer, with the middle class vanishing. (4) Convergence, unambiguous up to sampling error, is observed across US states.

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    File URL: http://cep.lse.ac.uk/pubs/download/DP0253.pdf
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    Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0253.

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    Date of creation: Jul 1995
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    Handle: RePEc:cep:cepdps:dp0253
    Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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    1. Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
    2. Quah, Danny, 1994. "Exploiting cross-section variation for unit root inference in dynamic data," Economics Letters, Elsevier, vol. 44(1-2), pages 9-19.
    3. Quah, Danny T, 1996. " Convergence Empirics across Economies with (Some) Capital Mobility," Journal of Economic Growth, Springer, vol. 1(1), pages 95-124, March.
    4. Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 443-474, August.
    5. Durlauf, S.M. & Johnson, P.A., 1995. "Multiple Regimes and Cross-Country Growth Behavior," Working papers 9419r, Wisconsin Madison - Social Systems.
    6. Quah, Danny, 1994. "One business cycle and one trend from (many,) many disaggregates," European Economic Review, Elsevier, vol. 38(3-4), pages 605-614, April.
    7. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
    8. Esteban, J. & Ray, D., 1993. "On the Measurement of Polarization," UFAE and IAE Working Papers 221.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    9. A. Desdoigts, 1995. "Changes in the World Income Distribution: a Non-Parametric Approach to Challenge the Neo-Classical Convergence Argument," SFB 373 Discussion Papers 1995,15, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    10. Ben-David, Dan, 1994. "Convergence Clubs and Diverging Economies," CEPR Discussion Papers 922, C.E.P.R. Discussion Papers.
    11. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    12. Helpman, E., 1992. "Innovation, Imitation and intellectual Property Rights," Harvard Institute of Economic Research Working Papers 1597, Harvard - Institute of Economic Research.
    13. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-32, December.
    14. R Koopmans & A Lamo, 1995. "Cross-Sectional Firm Dynamics: Theory and Empirical Results from the Chemical Sector," CEP Discussion Papers dp0229, Centre for Economic Performance, LSE.
    15. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
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