Income convergence of divergence? Study on selected Muslim countries

Duasa, Jarita (2008): Income convergence of divergence? Study on selected Muslim countries.

Abstract

In this paper, the existence of income convergence or income divergence is investigated on ten selected OIC (the Organisation of Islamic Conference) economies. The results are then linked to the degree of openness of the countries using globalization indices. In order to investigate the existence of either income convergence or divergence between selected Islamic countries, income differentials between selected OIC countries and the benchmark country are computed and a series of test is done. The tests include stationary linearity test using Augmented Dickey-Fuller (ADF) test for linear time-series and non-linear stationary test using Kapetanois et al. (KSS) tests for non-linear time series. The findings are that most of the countries experience income divergence except for three countries. By analyzing the degree of globalization in these economies, it is found that the results support the endogeneous theory and depending approach which predict that globalization is likely to cause income divergence (inequality) rather than convergence (equality)

• Item Type: MPRA Paper
• Language: English
• Keywords: Income convergence; globalization; linear stationary test; non-linear stationary test
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O49 - Other; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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