Is Swaziland on a path of convergence towards her main trading partners?

Phiri, Andrew (2018): Is Swaziland on a path of convergence towards her main trading partners?

Abstract

The Kingdom of Swaziland is a small, open economy which is heavily dependent on trade activity with neighboring and other industrialized countries. This study implements the recently-developed fractional frequency flexible Fourier form (FFFFF) unit root to examine the income convergence hypothesis for a dataset of per capita income differences between Swaziland and 5 of her main trading partners over a period of 1950 to 2016. With the exception of Japan, the empirical evidence indicates non-convergence of Swaziland towards her main trading partners.

• Item Type: MPRA Paper
• Language: English
• Keywords: Income convergence; fractional frequency flexible Fourier form (FFFFF) unit root test; Swaziland.
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production

References

Barro R. (1991), “Economic growth in a cross section of countries”, The Quarterly Journal of Economics, 106(2), 407-443.

Barro R. and Sala-i-Martin X. (1992), “Convergence”, Journal of Political Economy, 100(2), 223-251.

Baumol W. (1986), “Productivity growth, convergence and welfare: What the long run data show”, American Economic Review, 76(5), 1072-1085.

Ben-David D. (1996), “Trade and convergence among countries”, Journal of International Economics, 40, 279-298.

Davies R. (1987), “Hypothesis testing when a nuisance parameter is only identified under the alternative”, Biometrika, 47, 33-43.

Friedman M. (1992), “Do old fallacies ever die?”, Journal of Economics Literature, 30(4), 2129-2132.

Mankiw N., Romer D. and Weil D. (1992), “A contribution to the empirics of economic growth”, Quarterly Journal of Economics, 107, 407-437.

Omay T. (2015), “Fractional frequency flexible Fourier form to approximate smooth breaks in unit root testing”, Economic Letters, 134, 123-126.

Omay T. (2015), “Fractional frequency flexible Fourier form to approximate smooth breaks in unit root testing”, Economic Letters, 134, 123-126.

Omay T., Gupta R. and Bonaccolto G. (2017), “The US real GNP is trend-stationary after all”, Applied Econometrics Letters, 24(8), 510-514.

Quah D. (1993), “Glaton’s fallacy and tests of the convergence hypothesis”, Scandinavian Journal of Economics, 95(4), 427-443.

Rodrigues P and Taylor R. (2012), “The Flexible Fourier form and local generalized least squares de-trended unit root tests”, Oxford Bulletin of Economics and Statistics, 74(5), 736-759.

Romer P (1986), “Increasing returns and long-run growth”, Journal of Political Economy, 94(5), 1002-1037.

Romer P. (1990), “Endogenous technical change”, Journal of Political Economy, 98(5), 70-102.