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Pitfalls In Estimating ß-Convergence By Means Of Panel Data: An Empirical Test

Author

Listed:
  • Carluccio Bianchi

    () (Department of Economics and Quantitative Methods, University of Pavia)

  • Federica Calidoni

    (National Institute of Public Health (FHI))

  • Mario Menegatti

    (Dipartimento di Economia, Università di Parma)

Abstract

This paper aims to test the conjecture advanced in a recent work by Bianchi and Menegatti (2007) that usual !convergence panel regressions may produce biased evidence, due to their inability to distinguish between actual catching-up across countries and decreasing growth rates over time within countries. The test considers different sub-groups in a dataset of 72 countries for the period 1970-2000 and introduces both human capital and proxies for technological differences into the analysis. The results confirm the conjecture that traditional evidence about - convergence may be misleading; they also show that catching-up across countries is weaker than usually claimed and that this process occurred only in some sub-groups of countries.

Suggested Citation

  • Carluccio Bianchi & Federica Calidoni & Mario Menegatti, 2009. "Pitfalls In Estimating ß-Convergence By Means Of Panel Data: An Empirical Test," Quaderni di Dipartimento 102, University of Pavia, Department of Economics and Quantitative Methods.
  • Handle: RePEc:pav:wpaper:102
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    References listed on IDEAS

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    1. 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.
    2. Barro, Robert J. & Lee, Jong-Wha, 1994. "Sources of economic growth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 1-46, June.
    3. 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.
    4. Carluccio Bianchi & Mario Menegatti, 2007. "On the potential pitfalls in estimating β-convergence by means of pooled and panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 14(13), pages 963-967.
    5. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
    6. Evans, Paul, 1998. "Using Panel Data to Evaluate Growth Theories," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 295-306, May.
    7. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    8. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    9. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    10. 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.
    11. 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.
    12. Steve Dowrick & Mark Rogers, 2002. "Classical and technological convergence: beyond the Solow-Swan growth model," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 369-385, July.
    13. 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.
    14. C. Bianchi & M. Menegatti, 2004. "On the potential pitfalls in estimating convergence by means of pooled and panel data," Economics Department Working Papers 2004-EP02, Department of Economics, Parma University (Italy).
    15. Heston, Alan & Summers, Robert, 1996. "International Price and Quantity Comparisons: Potentials and Pitfalls," American Economic Review, American Economic Association, vol. 86(2), pages 20-24, May.
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    Cited by:

    1. Donatella Baiardi, 2012. "Innovation and the environmental Kuznets curve: the case of CO, NMVOCs and SOx in the Italian regions," Quaderni di Dipartimento 156, University of Pavia, Department of Economics and Quantitative Methods.

    More about this item

    Keywords

    Catching-up; Convergence; Economic Growth; Panel Estimation Techniques.;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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