IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/48836.html
   My bibliography  Save this paper

Does Convergence Exist?

Author

Listed:
  • Jahan, Sumbul

Abstract

DOES CONVERGENCE EXIST? Sumbul Jahan Institute of Business Administration (IBA), 2013 Research Project Supervisor: Dr. Farooq Pasha & Dr. Heman D. Lohano The idea of convergence in economics is the hypothesis that poorer economies income will tend to grow at faster rates than richer economies. As a result, all economies should eventually converge; Developing countries have the potential to grow at a faster rate than the developed countries because of availability of better health facilities and technological advancements adopted from developed countries. Convergence can have two meanings: firstly, absolute (σ) convergence refers to a reduction in the dispersion of levels of income across economies; beta (β) convergence occurs when poor economies grow faster than rich ones. This research estimates absolute and beta convergence using natural log of GDP per capita and natural log of GDP per person employed, highlighting the differences in results achieved using two income parameters. This research estimates absolute and beta convergence firstly for all countries of the world; then for all developed countries and all developing countries, which have been classified as per income groups; and lastly, all developing countries have been subdivided into three regional groups and absolute and beta convergence in those three groups namely: Europe & Asia, North & Sub Saharan Africa, and Latin America & the Caribbean for a time period of 31 years from 1980 – 2011. A pattern in results can be observed in this research, especially in three regional groups of developing countries. The differences in results in natural log of GDP per capita and natural log of GDP per person employed can be due to difference in literacy rate, standard of living, technological advancements, attitude towards work and many other structural variables.

Suggested Citation

  • Jahan, Sumbul, 2013. "Does Convergence Exist?," MPRA Paper 48836, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:48836
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/48836/1/MPRA_paper_48836.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    3. Enzo Weber, 2009. "Macroeconomic Integration in Asia-Pacific: Common Stochastic Trends and Business Cycle Coherence," The IUP Journal of Applied Economics, IUP Publications, vol. 0(3-4), pages 84-106, May-July.
    4. Venus Khim-Sen Liew & Kian-Ping Lim, 2005. "Income Divergence? Evidence of Non-linearity in the East Asian Economies," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-7.
    5. Esfandiar Maasoumi & Le Wang, 2008. "Economic Reform, Growth and Convergence in China," Econometrics Journal, Royal Economic Society, vol. 11(1), pages 128-154, March.
    6. Chowdhury, K, 2005. "What´s Happening to Per Capita Gdp in the ASEAN Countries?. An Analysis of Convergence, 1960-2001," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(3).
    7. Liew, Venus Khim-Sen & Ahmad, Yusuf, 2006. "Income convergence? Evidence of non-linearity in the East Asian Economies: A comment," MPRA Paper 519, University Library of Munich, Germany.
    8. Begu Liviu-Stelian & Teodorescu Irina-Teodora & Dimidov Ioana-Catalina & Istrate Ionut, 2010. "Analysis Of Convergence Within The European Union - Sigma And Beta Convergence," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 482-485, December.
    9. Don J Webber & Paul White, 2004. "Concordant Convergence Empirics," Working Papers 0409, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Convergence; absolute; beta;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pra:mprapa:48836. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.