Haider, Adnan and Hameed, Shahzad and Wajid, Abdul (2010): Income Convergence Hypothesis: A Regional Comparison of selected East and South Asian Economies.
Download (1MB) | Preview
The empirical literature on income convergence hypothesis is available for almost all developed or industrialized countries. However, regarding developing economies especially, South Asian region few studies attempted it in their convergence related empirical analysis. Therefore, the central objective of this paper is to empirically examine whether or not income convergence is occurring over time in South Asian economies. Furthermore, within Asian block, the study also compares the convergence results of South Asian economies with its parallel East Asian region. The empirical analysis test both absolute convergence hypothesis (using beta and sigma convergence methodologies as well as Theil’s inequality based approach) and conditional convergence hypothesis (by taking care of relevant control variables). These convergence tests are based on conventional regression equation approach by taking real GDP per capita with some explanatory control variables. Both steps employ the pooled cross-section, time series data set, which provides new insights in the convergence tests for real GDP per capita. Although, empirical analysis of this paper is unable to finds any evidence to accept the null hypothesis of the presence of absolute income convergence. However, our results show the presence of conditional income convergence for both East and South Asian economies. It indicates that income gap between these two groups of economies has narrow down conditional based on some common characteristics but it still remains quite large.
|Item Type:||MPRA Paper|
|Original Title:||Income Convergence Hypothesis: A Regional Comparison of selected East and South Asian Economies|
|Keywords:||absolute convergence; conditional convergence; Asian economies; growth theory|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Adnan Haider Adnan|
|Date Deposited:||08. Jul 2010 19:19|
|Last Modified:||31. Dec 2015 06:21|
Abramovitz, M. (1986), Catching Up, Forging Ahead, and Falling Behind, Journal of Economic History, June
Abramovitz, M. (1993), The Search for the Sources of Growth: Areas of Ignorance, Old and New, Journal of Economic History, 53: 217-243.
Ahmad, E. and A. Naz (2000), An empirical analysis of convergence hypothesis, The Pakistan development review, Vol. 39, No. 4, pp. 729-740.
Ahmed, W. and S. U. Khan (2008), A note on sustained economic growth in Pakistan, SBP research bulletin, Vol. 4, No. 1, pp. 81-89.
Aiyer, S. (2001), Growth Theory and Convergence across Indian States: A Panel Study, Chapter 8 in India at the Crossroads: Sustaining Growth and Reducing Poverty, ed. Tim Cullen, Patricia Reynolds and Christopher Towel, International Monetary Fund.
Barro, R.J. (1997), Determinants of Economic Growth, Cambridge, MA: MIT Press
Barro, R.J. (1991), Economic Growth in a Cross Section of Countries, Quarterly Journal of Economics, May.
Barro, R. J. and X. S. Martin (1991), Convergence, Journal of Political Economy, Vol. 100, No. 2, pp 223 – 251
Barro, R. J. and X. S. Martin (2004), Economic Growth, Second Edition, McGraw Hill, New York
Baumol, W.J., (1986), Productivity growth, convergence, and welfare: what the long-run data show, American Economic Review Vol. 76, pp 1072–1085.
Ben David, D., (1998), Convergence Clubs and Subsistence Economies, Journal of Development Economics, Vol. 55, pp 155-171
Bernard, A.B., C.I. Jones, (1996), Technology and convergence. Economic Journal, Vol. 106, pp 1037–1044.
Chatterji, M., (1992), Convergence Clubs and Endogenous Growth, Oxford Economic Review Policy, Vol. 8, pp 57-69
Chowdhury, K. and G. Malik (2007) Pair-wise Output Convergence in East Asia and the Pacific: An Application of Stochastic Unit Root Test, Economics Working Papers wp07-07, School of Economics, University of Wollongong, NSW, Australia.
Collins, S. and B. P. Bosworth (1997). Economic Growth in South Asia: Accumulation versus Assimilation, Brookings Papers on Economic Activity, Vol. 2, pp 135-203
Dasgupta, D, P. Maiti, R. Mukherjee, S. Searcher, and S. Chakraverti (2000), Growth and Interstate Disparities in India, Economic and Political Weekly, July 1
DeLong, J.B. (1988), Productivity Growth, Convergence and Welfare: Comment, American Economic Review, December.
DeLong, J.B. and S. Dowrick (2002), Globalisation and Convergence, in M. Bordo, A. Taylor and J.G. Williamson (eds), Globalisation in Historical Perspective, Chicago: University of Chicago Press.
Dowrick, S. (1992), Technological Catch-Up and Diverging Incomes, Economic Journal, May.
Elmslie, B. and A. J. Criss (1999), Theories of Convergence and Growth in the Classical Period: The Role of Science, Technology and Trade, Economica, February
Evans, G.W. and S. Honkapohja (1999), Learning Dynamics, in J.B. Taylor and M. Woodford (eds), Handbook of Macroeconomics, Amsterdam: North-Holland.
Galor, O. (1996), Convergence? Inferences from Theoretical Models, Economic Journal, Vol. 106, pp 1056-1069
Gerschenkron, A. (1962), Economic Backwardness in Historical Perspective, in B.F. Hoselitz (ed.), The Progress of Underdeveloped Areas, Chicago: University of Chicago Press.
Harberger, A. (1978), Perspectives on Capital and Technology in Less Developed Countries. In M. Artis, and A. Nobay (eds.). Contemporary Economic Analysis. London: Croom Helm. pp. 69-151
Islam, N. (1995), Growth Empirics: A Panel Data Approach, Quarterly Journal of Economics, Vol. 110, pp 1127-70
Krugman, P. (1994), The Myth of Asia’s Miracle, Foreign Affairs, Vol. 73, pp 62-78
Kshamanidhi A. (2002), Economic Growth and Convergence in India, Working Paper, Institute for Social and Economic Change, Nagarbhavi, V.K.R.V Rao Avenue, Bangalore, India
Lucas, R.E. Jr. (1988), On the Mechanics of Economic Development, Journal of Monetary Economics, July
Lucas, R.E. Jr. (1990), Why Doesn’t Capital Flow From Rich to Poor Countries?, American Economic Review, May
Mabunda, R. (2008), Analysis of Income Convergence across South African Provinces, Working Paper, Statistics South African Institute, SA
Macro, K. L. C. (2009), New Evidences about Convergence across States, International Research Journal of Finance and Economics, vol. 27, pp 7 – 18
Maddison, A. (1982), Phases of Capitalist Development, Oxford: Oxford University Press.
Mankiw, N.G., D. Romer, and D. N. Weil (1992), A Contribution to the Empirics of Economic Growth, Quarterly Journal of Economics, May
Marjit. S. and S. Mitra (1996), Convergence in Regional Growth Rates: Indian Research Agenda, Economic and Political Weekly, Vol. 31, No. 33
Melchior, A. (2001), Beliefs vs Facts in the Global Inequality Debate, World Economics, July–September.
Nehru, V. and A. Dhareshwar (1993). A New Database on Physical Capital Stock: Source, Methodology and Result. Revista de Analisis Economico, Vol. 8, pp 37-59
Park, D. (2003), An empirical examination of income convergence in the Asia-Pacific Region, Journal of Asian Economics, Vol. 14, pp 497 – 502
Pritchett, L. (1997), Divergence, Big Time, Journal of Economic Perspectives, Summer
Romer, P.M. (1986), Increasing Returns and Long-Run Growth, Journal of Political Economy, October
Romer, P.M. (1987), Crazy Explanations for the Productivity Slowdown, NBER Macroeconomics Annual
Marshall M. G. and K. Jaggers (2002), Polity IV Project: Political Regime Characteristics and Transitions, 1800-2002: Dataset Users Manual, Maryland: University of Maryland.
Miller, S. M. and M. P. Upadhyay (2002), Total factor productivity and Convergence Hypothesis, Journal of Macroeconomics, Vol. 24, pp 267 – 286
Sachs, J.D. and , A. M. Warner (1995), Economic Reform and the Process of Global Integration, Brookings Papers on Economic Activity
Sarel, M. and D. J. Robinson (1997), Growth and Productivity in ASEAN Countries. IMF Working Paper No. 97/97. Washington, D.C: IMF
Smith, A. (1776), An Inquiry Into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner (eds) (1976), Oxford: Clarendon Press
Solow, R.M. (1956), A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics, February
Steger T.M. (2003), The Segerstrom Model: Stability, Speed of Convergence and Policy Implications, Economics Bulletin, Vol. 15 No. 4, pp 1-8
Svetikas, K. Z., and I. Dzemyda (2009), Sustainable Regional Convergence: the Case Study of Lithuanian Countie, 5th International Vilnius Conference Proceedings
Swan, T.W. (1956), Economic Growth and Capital Accumulation, Economic Record, November
Theil, H. (1967), Economics and Information Theory, Amsterdam, North-Holland.
Quah, D., (1997), Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs, Journal of Economic Growth, Vol. 2, pp 27-59
Young, T. A. (1995), The tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience. Quarterly Journal of Economics, pp 642-680
Young, T. A., M. J. Higgins, and D. Levy (2008), Sigma-Convergence versus Beta-Convergence: Evidence from U.S. County-Level Data, Journal of Money, Credit and Banking, vol. 40, No. 5, pp. 1 – 14
Available Versions of this Item
- Income Convergence Hypothesis: A Regional Comparison of selected East and South Asian Economies. (deposited 08. Jul 2010 19:19) [Currently Displayed]