OLS-Estimation of conditional and unconditional sigma- and beta-convergence of per capita income: Implications of Solow-Swan and Ramsey-Cass models
In this paper I discuss the general statistical relationships between beta- and sigmaconvergence (for a definition see section 2) and the implications of the Solow-Swan and Ramsey-Cass model for an OLS-estimation of beta- and sigma-convergence of the log of per capita GDP over a cross section of countries. Furthermore, I present tests of conditional and unconditional sigma- and beta-convergence. The discussion of the statistical relations exhibits that based on the Cauchy-Schwarz inequality it is possible to show that sigma-convergence implies necessarily beta-convergence but that beta-convergence is compatible with sigma-convergence as well as sigma-divergence. The discussion of the implications of the Solow-Swan model shows that - depending on identical stochastics - these models imply unconditional beta- and sigma-convergence, if the cross section sample includes only economies with identical steady state parameters. If the economies display different steady state parameters both models imply conditional beta- and sigma-convergence. A replication of the well-known test results for conditional beta-convergence based on the Summers/Heston (1991) and the Barro/Lee (1993) data sets, does not reject conditional betaconvergence. However, the results of the tests for conditional sigma-convergence are sensitive concerning slight modifications of the cross section sample of countries.
|Date of creation:||1995|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 85853
Web page: http://www.ifw-kiel.de
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.:
- Robert J. Barro & Jong-Wha Lee, 1993.
"International Comparisons of Educational Attainment,"
NBER Working Papers
4349, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
- Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
- Robert J. Barro, 1991.
"Economic Growth in a Cross Section of Countries,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(2), pages 407-443.
- Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
- Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
- 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.
When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:698. 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: (Dieter Stribny)
If references are entirely missing, you can add them using this form.