IDEAS home Printed from https://ideas.repec.org/p/not/notcre/09-03.html
   My bibliography  Save this paper

The slow convergence of per capita income between the developing countries: “growth resistance” and sometimes “growth tragedy”

Author

Listed:
  • Gilles Dufrénot
  • Valérie Mignon
  • Théo Naccache

Abstract

This paper provides empirical evidence that there is no absolute convergence between the GDP per capita of the developing countries since 1950. Relying upon recent econometric methodologies (nonstationary long-memory models, wavelet models and time-varying factor representation models), we show that the transition paths to long-run growth are very persistent over time and non-stationary, thereby yielding a variety of potential growth steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates growth divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence.

Suggested Citation

  • Gilles Dufrénot & Valérie Mignon & Théo Naccache, 2009. "The slow convergence of per capita income between the developing countries: “growth resistance” and sometimes “growth tragedy”," Discussion Papers 09/03, University of Nottingham, CREDIT.
  • Handle: RePEc:not:notcre:09/03
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/credit/documents/papers/09-03.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Laura Mayoral, 2006. "Further Evidence on the Statistical Properties of Real GNP," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(s1), pages 901-920, December.
    2. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    3. Anke E. Hoeffler, 2002. "The augmented Solow model and the African growth debate," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 135-158, May.
    4. Walter Kramer & Philipp Sibbertsen, 2002. "Testing for Structural Changes in the Presence of Long Memory," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(3), pages 235-242, December.
    5. Elise Huillery, 2009. "History Matters: The Long-Term Impact of Colonial Public Investments in French West Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 176-215, April.
    6. Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
    7. Verspagen, Bart, 1995. "Convergence in the global economy. A broad historical viewpoint," Structural Change and Economic Dynamics, Elsevier, vol. 6(2), pages 143-165, June.
    8. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    9. Mark J. Jensen, 1997. "Using Wavelets to Obtain a Consistent Ordinary Least Squares Estimator of the Long Memory Parameter," Econometrics 9710002, University Library of Munich, Germany.
    10. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    11. Kevin Lee & M. Hashem Pesaran & Ron Smith, 1998. "Growth Empirics: A Panel Data Approach—A Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 319-323.
    12. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
    13. Wijnberg, Nachoem M, 1996. "Heterochrony, Industrial Evolution and International Trade," Journal of Evolutionary Economics, Springer, vol. 6(1), pages 99-113, February.
    14. Evans, Paul, 1996. "Using cross-country variances to evaluate growth theories," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1027-1049.
    15. Juncal Cunado & Luis A. Gil-Alana & Fernando Pérez de Gracia, 2006. "Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 67-91, April.
    16. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    17. Lipsey, Richard G. & Carlaw, Kenneth I. & Bekar, Clifford T., 2005. "Economic Transformations: General Purpose Technologies and Long-Term Economic Growth," OUP Catalogue, Oxford University Press, number 9780199290895.
    18. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    19. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    20. Diebold, Francis X. & Inoue, Atsushi, 2001. "Long memory and regime switching," Journal of Econometrics, Elsevier, vol. 105(1), pages 131-159, November.
    21. Paul Lau, Sau-Him, 1999. "I(0) In, integration and cointegration out:: Time series properties of endogenous growth models," Journal of Econometrics, Elsevier, vol. 93(1), pages 1-24, November.
    22. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    23. Banerjee, Abhijit & Somanathan, Rohini, 2007. "The political economy of public goods: Some evidence from India," Journal of Development Economics, Elsevier, vol. 82(2), pages 287-314, March.
    24. Gil-Alana, Luis A., 2002. "Seasonal long memory in the aggregate output," Economics Letters, Elsevier, vol. 74(3), pages 333-337, February.
    25. Michelacci, Claudio & Zaffaroni, Paolo, 2000. "(Fractional) beta convergence," Journal of Monetary Economics, Elsevier, vol. 45(1), pages 129-153, February.
    26. P.M. Robinson & D. Marinucci, 2000. "The Averaged Periodogram for Nonstationary Vector Time Series," Statistical Inference for Stochastic Processes, Springer, vol. 3(1), pages 149-160, January.
    27. Charalambos G. Tsangarides, 2001. "On Cross‐country Growth and Convergence: Evidence from African and OECD Countries," Journal of African Economies, Centre for the Study of African Economies, vol. 10(4), pages 355-389.
    28. Clifford M. Hurvich & Bonnie K. Ray, 1995. "Estimation Of The Memory Parameter For Nonstationary Or Noninvertible Fractionally Integrated Processes," Journal of Time Series Analysis, Wiley Blackwell, vol. 16(1), pages 17-41, January.
    29. George Kapetanios, 2000. "Testing for a Unit Root against Nonlinear STAR Models," National Institute of Economic and Social Research (NIESR) Discussion Papers 164, National Institute of Economic and Social Research.
    30. Lee Kian Lim & Michael McAleer, 2004. "Convergence and catching up in ASEAN: a comparative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 137-153.
    31. Roberto Cellini & Antonello E. Scorcu, 2000. "Segmented stochastic convergence across the G-7 countries," Empirical Economics, Springer, vol. 25(3), pages 463-474.
    32. De Long, J Bradford, 1988. "Productivity Growth, Convergence, and Welfare: Comment," American Economic Review, American Economic Association, vol. 78(5), pages 1138-1154, December.
    33. Shimotsu, Katsumi & Phillips, Peter C.B., 2006. "Local Whittle estimation of fractional integration and some of its variants," Journal of Econometrics, Elsevier, vol. 130(2), pages 209-233, February.
    34. repec:hal:wpspec:info:hdl:2441/10262 is not listed on IDEAS
    35. Marinucci, D & Robinson, Peter M., 2000. "The averaged periodogram for nonstationary vector time series," LSE Research Online Documents on Economics 2294, London School of Economics and Political Science, LSE Library.
    36. repec:hal:spmain:info:hdl:2441/10262 is not listed on IDEAS
    37. Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
    38. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, April.
    39. Beveridge, Stephen & Nelson, Charles R., 1981. "A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the `business cycle'," Journal of Monetary Economics, Elsevier, vol. 7(2), pages 151-174.
    40. Katsumi Shimotsu & Peter C.B. Phillips, 2000. "Modified Local Whittle Estimation of the Memory Parameter in the Nonstationary Case," Cowles Foundation Discussion Papers 1265, Cowles Foundation for Research in Economics, Yale University.
    41. Marmol, Francesc & Velasco, Carlos, 2002. "Trend stationarity versus long-range dependence in time series analysis," Journal of Econometrics, Elsevier, vol. 108(1), pages 25-42, May.
    42. Diebold, Francis X. & Rudebusch, Glenn D., 1989. "Long memory and persistence in aggregate output," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 189-209, September.
    43. Velasco, Carlos, 1999. "Non-stationary log-periodogram regression," Journal of Econometrics, Elsevier, vol. 91(2), pages 325-371, August.
    44. Christos Agiakloglou & Paul Newbold & Mark Wohar, 1993. "Bias In An Estimator Of The Fractional Difference Parameter," Journal of Time Series Analysis, Wiley Blackwell, vol. 14(3), pages 235-246, May.
    45. Karim Abadir & Gabriel Talmain, 2002. "Aggregation, Persistence and Volatility in a Macro Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 749-779.
    46. Shimotsu, Katsumi & Phillips, Peter C B, 2002. "Exact Local Whittle Estimation of Fractional Integration," Economics Discussion Papers 8838, University of Essex, Department of Economics.
    47. Chang Sik Kim & Peter C.B. Phillips, 2006. "Log Periodogram Regression: The Nonstationary Case," Cowles Foundation Discussion Papers 1587, Cowles Foundation for Research in Economics, Yale University.
    48. repec:bla:reviec:v:9:y:2001:i:1:p:153-62 is not listed on IDEAS
    49. Strauss, Jack, 2000. "Is there a permanent component in US real GDP," Economics Letters, Elsevier, vol. 66(2), pages 137-142, February.
    50. J. Holmes, Mark, 2002. "Convergence in International Output: Evidence from Panel Data Unit Root Tests," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 826-838.
    51. Durlauf, Steven N & Phillips, Peter C B, 1988. "Trends versus Random Walks in Time Series Analysis," Econometrica, Econometric Society, vol. 56(6), pages 1333-1354, November.
    52. 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 1072-1085, December.
    53. Almeida, Paul & Kogut, Bruce, 1997. "The Exploration of Technological Diversity and the Geographic Localization of Innovation," Small Business Economics, Springer, vol. 9(1), pages 21-31, February.
    54. Joseph G. Haubrich & Andrew W. Lo, 2001. "The sources and nature of long-term memory in aggregate output," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 15-30.
    55. D Marinucci & Peter M Robinson, 2000. "The Averaged Periodogram for Nonstationary Vector Time Series," STICERD - Econometrics Paper Series 408, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    56. C. W. J. Granger & Roselyne Joyeux, 1980. "An Introduction To Long‐Memory Time Series Models And Fractional Differencing," Journal of Time Series Analysis, Wiley Blackwell, vol. 1(1), pages 15-29, January.
    57. repec:bla:obuest:v:64:y:2002:i:2:p:135-58 is not listed on IDEAS
    58. Arielle Beyaert, 2004. "Fractional Output Convergence, with an Application to Nine Developed Countries," Econometric Society 2004 Australasian Meetings 280, Econometric Society.
    59. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stengos Thanasis & Yazgan M. Ege, 2014. "Persistence in real exchange rate convergence," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 18(1), pages 73-88, February.
    2. Stengos, Thanasis & Yazgan, M. Ege, 2014. "Persistence In Convergence," Macroeconomic Dynamics, Cambridge University Press, vol. 18(4), pages 753-782, June.
    3. Panagiotidis, Theodore & Papapanagiotou, Georgios & Stengos, Thanasis, 2023. "Dying together: A convergence analysis of fatalities during COVID-19," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    4. Kadigi, Reuben M.J. & Robinson, Elizabeth & Szabo, Sylvia & Kangile, Joseph & Mgeni, Charles P. & De Maria, Marcello & Tsusaka, Takuji & Nhau, Brighton, 2022. "Revisiting the Solow-Swan model of income convergence in the context of coffee producing and re-exporting countries in the world," LSE Research Online Documents on Economics 115636, London School of Economics and Political Science, LSE Library.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gilles Dufrénot & Valérie Mignon & Théo Naccache, 2012. "Testing Catching-Up Between The Developing Countries: “Growth Resistance” And Sometimes “Growth Tragedy”," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 470-508, October.
    2. Juncal Cunado & Luis A. Gil-Alana & Fernando Pérez de Gracia, 2006. "Additional Empirical Evidence on Real Convergence: A Fractionally Integrated Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 67-91, April.
    3. Cunado, J. & Gil-Alana, L. A. & Perez de Gracia, F., 2004. "Real convergence in Taiwan: a fractionally integrated approach," Journal of Asian Economics, Elsevier, vol. 15(3), pages 529-547, June.
    4. Arielle Beyaert, 2004. "Fractional Output Convergence, with an Application to Nine Developed Countries," Econometric Society 2004 Australasian Meetings 280, Econometric Society.
    5. Burcu Ozcan, 2014. "Does Income Converge among EU Member Countries following the Post-War Period? Evidence from the PANKPSS Test," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 22-38, October.
    6. Stengos, Thanasis & Yazgan, M. Ege, 2014. "Persistence In Convergence," Macroeconomic Dynamics, Cambridge University Press, vol. 18(4), pages 753-782, June.
    7. Cunado, J. & Perez de Gracia, F., 2006. "Real convergence in Africa in the second-half of the 20th century," Journal of Economics and Business, Elsevier, vol. 58(2), pages 153-167.
    8. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    9. Guglielmo Caporale & Luis Gil-Alana, 2013. "Long memory in US real output per capita," Empirical Economics, Springer, vol. 44(2), pages 591-611, April.
    10. Mushtaq Ahmad Malik & Tariq Masood, 2022. "Dynamics of Output Growth and Convergence in the Middle East and North African Countries: Heterogeneous Panel ARDL Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1444-1469, June.
    11. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.
    12. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    13. Uzma Zia, 2019. "An Evidence of Diverging SAARC Economies," PIDE-Working Papers 2019:170, Pakistan Institute of Development Economics.
    14. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
    15. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    16. Giovanni Caggiano & Leone Leonida, 2009. "International output convergence: evidence from an autocorrelation function approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(1), pages 139-162.
    17. Greasley, David & Oxley, Les, 1998. "Comparing British and American Economic and Industrial Performance 1860-1993: A Time Series Perspective," Explorations in Economic History, Elsevier, vol. 35(2), pages 171-195, April.
    18. Xanthippi Chapsa & Athanasios L. Athanasenas & Nikolaos Tabakis, 2019. "Real Convergence in EU-15: A Comparative Analysis of North versus South Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 3-21.
    19. Peter C. B. Phillips & Donggyu Sul, 2009. "Economic transition and growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1153-1185, November.
    20. Matsuki, Takashi, 2019. "Per capita output convergence across Asian countries: Evidence from covariate unit root test with an endogenous structural break," Economic Modelling, Elsevier, vol. 82(C), pages 99-118.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:not:notcre:09/03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hilary Hughes (email available below). General contact details of provider: https://edirc.repec.org/data/cenotuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.