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A Matter of Time: Revisiting Growth Convergence in China

China’s unbalanced growth strategy has seemingly fostered growing inter-regional growth disparities and there is little evidence of wealth trickling down from richer provinces to poorer provinces. Given pronounced and frequent inter-regional short-term fluctuations in economic growth, standard convergence tests, however, may be ill specified to detect underlying long-term growth trends in small samples. Our paper suggests a novel approach to distinguish between long-term growth trends and short-term fluctuations. Based on provincial data from 1978 to 2009, our results indicate that China’s provinces only diverge over the short-term. Over the long term, provinces cluster into two converging growth clubs.

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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2011:23.

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Length: 37 pages
Date of creation: 04 Jul 2011
Date of revision: 01 Mar 2012
Publication status: Published as Andersson, Fredrik N. G., David Edgerton and Sonja Opper, 'A Matter of Time: Revisiting Growth Convergence in China' in World Development, 2013, pages 239-251.
Handle: RePEc:hhs:lunewp:2011_023
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Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden

Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en

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