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Empirics for Economic Growth and Convergence

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  • Danny Quah

Abstract

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.

Suggested Citation

  • Danny Quah, 1995. "Empirics for Economic Growth and Convergence," CEP Discussion Papers dp0253, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0253
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    Cited by:

    1. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW), vol. 3, pages 1-72.
    2. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
    3. Lima, Luiz Renato & Notini, Hilton Hostalácio & Reis Gomes, Fábio Augusto, 2010. "Empirical Evidence on Convergence Across Brazilian States," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(2), June.
    4. Michelacci, Claudio & Zaffaroni, Paolo, 2000. "(Fractional) beta convergence," Journal of Monetary Economics, Elsevier, vol. 45(1), pages 129-153, February.
    5. Parantap Basu & Tooraj Jamasb, 2019. "On Green Growth with Sustainable Capital," Working Papers 2019_06, Durham University Business School.
    6. Burnett, J. Wesley, 2016. "Club convergence and clustering of U.S. energy-related CO2 emissions," Resource and Energy Economics, Elsevier, vol. 46(C), pages 62-84.
    7. Marie-Eve Mulquin & Katja Senger, 2011. "Interregional transfers and economic convergence of regions," Serie Politique Economique 58, Université de Namur, Centre de Recherches en Economie Regionale et Politique Economique.
    8. Mahmoud A. El-Gamal & Deockhyun Ryu, 2013. "Nonstationarity and Stochastic Stability of Relative Income Clubs," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 756-775, December.
    9. Peng Bin, 2016. "Dynamic Development of Regional Disparity in Mainland China: An Experimental Study Based on a Multidimensional Index," Sustainability, MDPI, Open Access Journal, vol. 8(12), pages 1-28, December.
    10. Kocenda, Evzen & Papell, David H, 1997. "Inflation Convergence within the European Union: A Panel Data Analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(3), pages 189-198, July.
    11. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA [Tariffs Reduction and Real Convergence in WAEMU]," MPRA Paper 26763, University Library of Munich, Germany.
    12. Giuseppe Carone & Cécile Denis & Kieran Mc Morrow & Gilles Mourre & Werner Röger, 2006. "Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework," European Economy - Economic Papers 2008 - 2015 253, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Carmela Martin & Francisco J. Velazquez & Bernard Funck, 2001. "European Integration and Income Convergence : Lessons for Central and Eastern European Countries," World Bank Publications, The World Bank, number 13968, July.
    14. Kieran McMorrow & Werner Roger, 2011. "Catching-up Prospects After the Crisis for the EU’s CESEE Region," Chapters, in: Ewald Nowotny & Peter Mooslechner & Doris Ritzberger-Grünwald (ed.), Post-Crisis Growth and Integration in Europe, chapter 4, Edward Elgar Publishing.
    15. Mădălina AVRAM & Constantin POSTOIU, 2016. "Territorial patterns of development in the European Union," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(606), S), pages 77-88, Spring.
    16. Freeman, Donald G. & Yerger, David B., 2001. "Interpreting cross-section and time-series tests of convergence: the case of labor productivity in manufacturing," Journal of Economics and Business, Elsevier, vol. 53(6), pages 593-607.
    17. Coulombe, Serge & Lee, Frank C., 1998. "Évolution à long terme de la convergence régionale au Canada," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(1), pages 5-27, mars.
    18. Péter Halmai & Viktória Vásáry, 2012. "Convergence crisis: economic crisis and convergence in the European Union," International Economics and Economic Policy, Springer, vol. 9(3), pages 297-322, September.

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