Citation

Discussion Paper Details

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Title: Testing for Convergence Clubs in Income per-capita: A Predictive Density Approach

Author(s): Fabio Canova

Publication Date: August 1999

Keyword(s): Heterogeneities, Income Inequality, Panel Data and Predictive Density

Programme Area(s): International Macroeconomics

Abstract: The paper proposes a technique to test jointly for groupings of unknown size in the cross-sectional dimension of a panel and estimates the parameters of each group, applying it to identifying convergence clubs in income per-capita. The approach uses the predictive density of the data, conditional on the parameters of the model. The steady state distribution of European regional data clusters around four poles of attraction with different economic features. The distribution of income per-cpaita of OECD countries has two poles of attraction and each group has clearly identifiable economic characteristics.

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Bibliographic Reference

Canova, F. 1999. 'Testing for Convergence Clubs in Income per-capita: A Predictive Density Approach'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2201