Convergence Patterns in the World Economy: Exploring the Non-Linearity Hypothesis
The objective of this paper is to question the conventional convergence literature, which bases its findings on the use of linear regression models. With the use of quadratic WLS regression analysis we show that a number of indicators of economic performance follow a pattern of change that is in essence non-linear. Our results indicate the formation of two clubs at the world scale: A convergence club that includes countries with a low to mediumhigh level of development and a divergence club including countries with a medium-high to very high levels of development. After a critical threshold the forces of divergence at the world scale dominate and the most dynamic countries eventually grow faster. Undoubtedly, the formation of a diverging leaders club and a further increase in world level development gap has serious implications for theory and policy.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (353-1) 863 2000
Fax: (353-1) 863 2100
Web page: http://www.esri.ie
More information through EDIRC
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.:
- Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
- Xavier Sala-i-Martin, 1995.
"The classical approach to convergence analysis,"
Economics Working Papers
117, Department of Economics and Business, Universitat Pompeu Fabra.
- Andres RodrIguez-Pose & Ugo Fratesi†, 2004.
"Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions,"
Taylor & Francis Journals, vol. 38(1), pages 97-113.
- Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers 28, European Economy Group.
- Aghion, P. & Howitt, P., 1989.
"A Model Of Growth Through Creative Destruction,"
527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- Danny Quah, 1992.
"Empirical Cross-Section Dynamics in Economic Growth,"
FMG Discussion Papers
dp154, Financial Markets Group.
- Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
- Danny Quah, 1992. "Empirical cross-section dynamics in economic growth," Discussion Paper / Institute for Empirical Macroeconomics 75, Federal Reserve Bank of Minneapolis.
- Ron Martin, 2001.
"EMU versus the regions? Regional convergence and divergence in Euroland,"
Journal of Economic Geography,
Oxford University Press, vol. 1(1), pages 51-80, January.
- Ron Martin, 2000. "Emu Versus The Regions? Regional Convergence And Divergence In Euroland," ESRC Centre for Business Research - Working Papers wp179, ESRC Centre for Business Research.
- Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
- Xavier Sala-i-Martin, 1997.
"I just ran four million regressions,"
Economics Working Papers
201, Department of Economics and Business, Universitat Pompeu Fabra.
- Arvanitidis, Paschalis & Petrakos, George & Pavleas, Sotiris, 2007. "Determinants of economic growth: the experts’ view," Papers DYNREG20, Economic and Social Research Institute (ESRI).
- Gouyette, Claudine & Neven, Damien J, 1994.
"Regional Convergence in the European Community,"
CEPR Discussion Papers
914, C.E.P.R. Discussion Papers.
- Damien NEVEN & Claudine GOUYETTE, 1993. "Regional Convergence in the European Comunity," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9311, Université de Lausanne, Faculté des HEC, DEEP.
- Grier, Kevin B. & Tullock, Gordon, 1989. "An empirical analysis of cross-national economic growth, 1951-1980," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 259-276, September.
- Raffaele Paci, 1997.
"More similar and less equal: Economic growth in the European regions,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 133(4), pages 609-634, December.
- R. Paci, 1996. "More similar and less equal. Economic growth in the European regions," Working Paper CRENoS 199609, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Lee, M. & Longmire, R. & Matyas, L. & Harris, M., 1996.
"Growth Convergence: Some Panel Data Evidence,"
Monash Econometrics and Business Statistics Working Papers
14/96, Monash University, Department of Econometrics and Business Statistics.
- Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
- Button, Kenneth J & Pentecost, Eric J, 1995. "Testing for Convergence of the EU Regional Economies," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 664-71, October.
- Fölster, Stefan & Henrekson, Magnus, 1997.
"Growth and the Public Sector: A Critique of the Critics,"
Working Paper Series
492, Research Institute of Industrial Economics, revised 10 Jun 1998.
- Folster, Stefan & Henrekson, Magnus, 1999. "Growth and the public sector: a critique of the critics," European Journal of Political Economy, Elsevier, vol. 15(2), pages 337-358, June.
- de la Fuente, A., 1995.
"Catch-up, Growth and Convergence in the OECD,"
UFAE and IAE Working Papers
314.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- 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.
- Matthew Cole & Eric Neumayer, 2003. "The pitfalls of convergence analysis: is the income gap really widening?," Applied Economics Letters, Taylor & Francis Journals, vol. 10(6), pages 355-357.
- Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
- A. Di Liberto & J. Symons, 1999.
"Some Econometric Issues In Convergence Regressions,"
Working Paper CRENoS
199904, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Adriana Di Liberto & James Symons, 2003. "Some Econometric Issues in Convergence Regressions," Manchester School, University of Manchester, vol. 71(3), pages 293-307, 06.
- Strazicich, Mark C. & Lee, Junsoo & Day, Edward, 2004. "Are incomes converging among OECD countries? Time series evidence with two structural breaks," Journal of Macroeconomics, Elsevier, vol. 26(1), pages 131-145, March.
When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:dynreg32. 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: (Sarah Burns)
If references are entirely missing, you can add them using this form.