Young, Andrew and Higgins, Matthew and Levy, Daniel (2006): Heterogeneous Convergence.
Download (288kB) | Preview
We use US county-level data containing 3,058 cross-sectional observations and 41 conditioning variables to study economic growth and explore possible heterogeneity in growth determination across 32 individual states. Using a 3SLS-IV estimation method, we find that the convergence rates for 32 individual states are above 2 percent, with an average of 8.1 percent. For 7 states the convergence rate can be rejected as identical to at least one other state’s convergence rate with 95 percent confidence. Convergence rates are negatively correlated with initial income. The size of government at all levels of decentralization is either unproductive or negatively correlated with growth. Educational attainment has a non-linear relationship with growth. The size of the finance, insurance and real estate, and entertainment industries are positively correlated with growth, while the size of the education industry is negatively correlated with growth. Heterogeneity in the effects of balanced growth path determinants across individual states is harder to detect than in convergence rates.
|Item Type:||MPRA Paper|
|Institution:||University of Mississippi, Georgia Institute of Technology, and Bar-Ilan University|
|Original Title:||Heterogeneous Convergence|
|Keywords:||Economic Growth; Conditional Convergence; County Level Data|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
|Depositing User:||Daniel Levy|
|Date Deposited:||29. Nov 2006|
|Last Modified:||13. Feb 2013 10:14|
Barro, Robert J. (1991), “Economic Growth in a Cross Section of Countries,” Quarterly Journal of Economics 106, 407–443.
Barro, Robert J. (1997), Determinants of Economic Growth: A Cross-Country Empirical Study (Cambridge, MA: MIT Press).
Barro, Robert J., Mankiw, N. Gregory and Sala-Martin, Xavier (1995), “Capital Mobility in Neoclassical Models of Growth,” American Economic Review 85, 103–115.
Barro, Robert J. and Sala-I-Martin, Xavier (1991), “Convergence across States and Regions,” Brookings Papers on Economic Activity 1, 107–158.
Barro, Robert J. and Sala-i-Martin, Xavier (1992), “Convergence,” Journal of Political Economy 100, 223–251.
Berger, A.N., Kashyap, Anil K. and Hannan, T.H. (1995), “The Transformation of the U.S. Banking Industry: What a Long, Strange Trip It’s Been,” Brookings Papers on Economic Activity 2, 55–218.
Bliss, Christopher (1999), “Galton’s Fallacy and Economic Convergence,” Oxford Economic Papers 51, 4–14.
Brock, William A. and Steven N. Durlauf (2001), “Growth Empirics and Reality,” World Bank Economic Review 15, 229–272.
Canova, Fabio (2004), “Testing for Convergence Clubs in Income Per Capita: A Predictive Density Approach,” International Economic Review 45, 49–77.
Caselli, Francesco, Esquivel, Gerardo and Lefort, Fernando (1996), “Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics,” Journal of Economic Growth 1, 363–389.
Colorado Department of Education, “Title 22, Colorado Revised Statutes: Education Article 33: School Attendance Law of 1963 Section 104.”
Conley, Timothy J. (1999), “GMM Estimation with Cross Sectional Dependence,” Journal of Econometrics 92, 1–45.
Costa, Dora L. (1997), “Less of a Luxury: The Rise of Recreation since 1888,” NBER Working Paper No. 6054, June.
Desdoigts, Alan (1999), “Patterns of Economic Development and the Formation of Clubs,” Journal of Economic Growth 4, 305–330.
Dezhbakhsh, Hashem and Daniel Levy (1994), “Periodic Properties of Interpolated Time Series,” Economics Letters 44, 221–228. Driscoll, John C. (2004), “Does Bank Lending Affect Output? Evidence from the U.S. States,” Journal of Monetary Economics 51, 451–471.
Durlauf, Steven N. and Paul A. Johnson (1995), “Multiple Regimes and Cross-Country Growth Behavior,” Journal of Applied Econometrics 10, 365–384.
Durlauf, Steven N., Andros Kourtellos, and Artur Minkin (2001), “The Local Solow Growth Model,” European Economic Review 45, 928–940.
Eadington, William R. (1999). “The Economics of Casino Gambling,” Journal of Economic Perspectives 13, 173–192.
Easterly, William and Sergio Rebelo (1993), “Fiscal Policy and Economic Growth,” Journal of Monetary Economics 32, 417–458.
Evans, Paul (1997a), “How Fast Do Economies Converge?” Review of Economics and Statistics 36, 219–225.
Evans, Paul (1997b), “Consistent Estimation of Growth Regressions,” unpublished manuscript, available at http://economics.sbs.ohiostate.edu/pevans/pevans.html.
Evans, Paul (1998), “Using Panel Data to Evaluate Growth Theories,” International Economics Review 39, 295–306.
Evans, Paul and Georgios Karras (1994), “Are Government Activities Productive? Evidence from a Panel of US States” Review of Economics and Statistics 76, 1–11.
Folster, Stefan and M. Henrekson (2001), “Growth Effects of Government Expenditure and Taxation in Rich Countries,” European Economic Review 45, 1501–1520.
Greenwood, Jeremy and Boyan Jovanovic (1990), “Financial Development, Growth, and the Distribution of Income,” Journal of Political Economy 98, 1076–1107.
Higgins, Matthew, Daniel Levy and Andrew T. Young (2006), “Growth and Convergence across the U.S: Evidence from County-Level Data,” Review of Economics and Statistics, forthcoming.
Islam, Nazrul (1995), “Growth Empirics: A Panel Data Approach,” Quarterly Journal of Economics 110, 1127–1170.
Kane, Thomas J. and Cecilia E. Rouse (1995), “Labor-Market Returns to Two- and Four-Year College,” American Economic Review 85, 600–614.
King, Robert G. and Ross Levine (1993), “Finance and Growth: Schumpeter May be Right,” Quarterly Journal of Economics 108, 717–737. Lee, Kevin, M. Hashem Pesaran and Ron Smith (1997), “Growth and Convergence in a Multi-Country Empirical Stochastic Growth Model,” Journal of Applied Econometrics 12, 357–384.
Levine, Ross and D. Renelt (1992), “A Sensitivity Analysis of Cross-Country Growth Regressions,” American Economic Review 82, 942–963.
Levy, Daniel (2000), “Investment-Saving Co-Movement and Capital Mobility: Evidence from Century Long US Time Series” Review of Economic Dynamics 3, 100–136.
Levy, Daniel (2004), “Is the Feldstein-Horioka Puzzle Really a Puzzle?” in Aspects of Globalization: Macroeconomic and Capital Market Linkages in the Integrated World Economy, edited by Christopher Tsoukis, George M. Agiomirgianankis, and Tapan Biswas (London: Kluwer Academic Publishers), 49–66.
Levy, Daniel and H. Dezhbakhsh (2003), “International Evidence on Output Fluctuation and Shock Persistence,” Journal of Monetary Economics 50, 1499–1530.
Mankiw, N. Gregory, David Romer, and David N. Weil (1992), “A Contribution to the Empirics of Economic Growth,” Quarterly Journal of Economics 107, 407–437.
Marlow, Michael L. (2001), “Bureaucracy and Student Performance in U.S. Public Schools,” Applied Econometrics 33, 1314–1350.
Quah, Danny T. (1996), “Twin Peaks: Growth and Convergence in Models of Distributional Dynamics,” Economic Journal 106, 1045–1055.
Quah, Danny T. (1997), “Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs,” Journal of Economic Growth 2, 27–59.
Rappaport, Jordan (1999), “Local Growth Empirics,” CID W.P. #23, Harvard University.
Rappaport, Jordan (2000), “Is the Speed of Convergence Constant?” Working Paper No. 00-10, Federal Reserve Bank of Kansas City.
Rappaport, Jordan (2004), “Why Are Population Flows so Persistent?” Journal of Urban Economics 56, 554–580.
Rappaport, Jordan (2005), “How Does Labor Mobility Affect Income Convergence?” Journal of Economic Dynamics and Control 29, 567–581.
Rappaport, Jordan (2006), “Moving to Nice Weather,” Regional Science and Urban Economics, forthcoming.
Rappaport, Jordan and Jeffrey D. Sachs (2003), “The United States as a Coastal Nation,” Journal of Economic Growth 8, 5–46. Rousseau, Peter L. and Paul Wachtel (1998), “Financial Intermediation and Economic Performance: Historical Evidence from Five Industrialized Countries,” Journal of Money, Credit and Banking 30, 657–678.
Sala-i-Martin, Xavier X. (1996), “Regional Cohesion: Evidence and Theories of Regional Growth and Convergence,” European Economic Review 40, 1325–1352.
Siegfried, John and Andrew Zimbalist (2000), “The Economics of Sports Facilities and Their Communities,” Journal of Economic Perspectives 14, 95–114.
Surette, Brian J. (1997), “The Effects of Two-Year College on the Labor Market and Schooling Experiences of Young Men,” Board of the Governors of the Federal Reserve System, Finance and Economic Discussion Series, No. 1997/44.
US Department of Education (1999–2000), National Center for Education Statistics, Schools and Staffing Survey, 1999–2000. Tables 1.01 and 2.01.
US Department of Education (2001), Digest of Education Statistics, Table 151.
US Department of Education (2001), Digest of Education Statistics, Table 137.
Walker, Douglas M. and John D. Jackson (1998), “New Goods and Economic Growth,” Review of Regional Studies 28, 47–69
Available Versions of this Item
- Heterogeneous Convergence. (deposited 29. Nov 2006) [Currently Displayed]