Does Convergence Exist?
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.
|Date of creation:||Jun 2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.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.:
- Enzo Weber, 2006.
"Macroeconomic Integration in Asia Pacific: Common Stochastic Trends and Business Cycle Coherence,"
SFB 649 Discussion Papers
SFB649DP2006-039, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- 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.
- 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).
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Esfandiar Maasoumi & Le Wang, 2008.
"Economic Reform, Growth and Convergence in China,"
Royal Economic Society, vol. 11(1), pages 128-154, 03.
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)
If references are entirely missing, you can add them using this form.