Munich Personal RePEc Archive

Income convergence: fresh evidence from the Nordic countries

Liew, Venus Khim-Sen and Ahmad, Yusuf (2006): Income convergence: fresh evidence from the Nordic countries.

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Abstract

Using the recently developed linearity test and non-linear unit root test, this study shows that the income gaps of Finland, Norway and Sweden with respect to Denmark are non-linear but stationary with no significant trend effect, implying the Nordic countries have already attained steady state of income equality, a state beyond catching up as identified earlier in Oxley and Greasley (1999). This fresh evidence strengthens the finding of Nordic Convergence Club by these authors.

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