Skip to main navigation menu Skip to main content Skip to site footer

Testing and measurement of economic convergence: A review of some recent developments

DOI:

https://doi.org/10.15678/PM.2018.0402.01

Abstract

Objective: This article reviews the empirical findings about the convergence hypothesis obtained in the period 1992-2017. In the first place it investigates the specifications of economic indicators used in testing the convergence effect. Further, the paper provides a breakdown of the convergence research development after the financial crisis.

Research Design & Methods: The research method is based on critical literature review. Hence, this article builds on other author’s surveys, summarizes them and concludes the development.

Findings: No trend in analysed literature has been seen. The convergence debate is still not settled. With respect to the financial crisis, many authors describe it as having positive effect on convergence. However despite inserting dummy data or splitting the analysis for the pre- and post-crisis periods, no method to deal with the slowdown was noted.

Contribution & Value Added: Providing the empirical results in one place, this review is for sure a good starting point for people interested in the convergence process. Also some more experienced researchers may find, that the debate is still not settled and the topic is worth further investigation.

Keywords

literature review, economic growth, financial crisis, beta and sigma convergence, convergence debate

PDF

Author Biography

Dawid Jarco

Bachelor of Accounting and Controlling (Cracow University of Economics, Poland); Master in Economics
(Cracow University of Economics, Poland); PhD student in Economics, Finance and Management
(Cracow University of Economics, Poland). Professionally working as business unit Financial
Controller in Vienna (Mondi Plc, Vienna). His research interests include economic growth
and practical business controlling application methods.


References

  1. Barro, R.J., & Sala-I-Martin, X. (1992). Convergence. Journal of Political Economy, 100(2), 223-251. DOI: 10.1086/261816.
  2. Barro, R.J., & Lee, J. W. (1993). International comparisons of educational attain-ment. Journal of monetary economics, 32(3), 363-394.
  3. Baumol, W.J. (1986). Productivity growth, convergence, and welfare: what the long-run data show. The American Economic Review, 1072-1085.
  4. Begu, L., Spataru, S. & Constantin, O. (2014). The effect of economic crisis upon con-vergence and cohesion in the European Union. Procedia Economics and Finance, 10, 150-157. DOI: 10.1016/S2212-5671(14)00288-3.
  5. Brzeski, A., & Colombatto, E. (1999). Can Eastern Europe Catch Up? Post-Communist Economies, 11(1), 5-25. DOI: 10.1080/14631379996020.
  6. Chapsa, X., Tsanana, E. & Katrakilidis, C. (2015). Growth and Convergence in the EU-15: More Evidence from the Cohesion Countries. Procedia Economics and Finance, 33, 55-63. DOI: 10.1016/S2212-5671(15)01693-7.
  7. Dauderstädt, M. (2014). Convergence in crisis. European Integration in Jeopardy.
  8. Dowrick, S., & DeLong, J. B. (2003). Globalization and convergence. In Globalization in historical perspective (pp. 191-226). University of Chicago Press.
  9. Dvorokova, K. (2014). Sigma versus Beta-Convergence in EU28 in Financial Crisis and Post-Crisis Period. Mathematical Methods in Finance and Business Administration, 11, 88-94.
  10. Głodowska, A. (2015). Beta and Sigma Convergence within the European Union Count-ries and Regions. Proceedings of the 6th GCRM 2015, 233-245.
  11. Holmes, M.J. (2004). New Evidence on long-run Output Convergence among Latin American Countries. Journal of Apllied Economics, 8(2), 299-319.
  12. Ingo, T.P. (1995). Konvergenz und Divergenz in der Europäischen Union: Theoretischer Überblick, empirische Evidenz und wirtschaftspolitische Implikationen. Kiel Work-ing Paper, 682.
  13. Inklaar, R. & Timmer, M.P. (2009). Produtivity Convergence across Industries and Countries: The Importance of theory-based Measurement. Macroeconomic Dynam-ics, 13(2), 218-240. DOI: 10.1017/S1365100509090117.
  14. Islam, N. (1995). Growth Empirics: A Panel Data Approach. The Quarterly Journal of Economics, 110(4), 1127-1170. DOI: 10.2307/2946651.
  15. Islam, N. (2003). What have we learnt from the Convergence Debate? Journal of Eco-nomic Surveys, 17(3), 309-362. DOI: 10.1111/1467-6419.00197.
  16. Jahan, S. (2013). Does Convergence Exist? MPRA Munich Personal RePEc Archive, 48836.
  17. Jayanthakumaran, K. & Lee, S. (2013). Evidence on the convergence of per capita in-come: a comparison of founder members of the Association of South East Asian Nations and the South Asian Association of Regional Cooperation. Pacific Econom-ic Review, 18(1), 108-121.
  18. Kaitila, V. (2005). Integration and Conditional Convergence in the enlarged EU Area. ETLA Discussion Papers, 935.
  19. Kumo, W.L. (2011). Growth and Macroeconomic Convergence in Southern Africa. Afri-can Development Bank Group Working Paper, 130.
  20. Liberto, A.D., Pigliaru, F., & Mura, R. (2007). How to measure the unobservable: a pan-el technique for the analysis of TFP convergence. Oxford Economic Papers, 60, 343-368. DOI: 10.1093/oep/gpm022.
  21. Lumsdaine, R.L., & Papell, D. H. (1997). Multiple trend breaks and the unit-root hy-pothesis. Review of economics and Statistics, 79(2), 212-218.
  22. Mankiw, N.G., Romer, D. & Weil, D.N. (1992). A Contribution to the Empirics of Eco-nomic Growth. The Quarterly Journal of Economics, 107(2), 407-437. DOI: 10.2307/2118477.
  23. Martin, C. & Sanz, I. (2003). Real Convergence and European Integration: The Experi-ence of the Less Developed EU Members. Empirica Journal of European Economics, 30, 205-236.
  24. Martin, C., Velázquez, F.J., Funck, B. (2001). European Integration and income Conver-gence: Lessons For Central and Eastern European Countries. World Bank Technical Papers, 514.
  25. Mathur, S.K. (2005). Absolute Convergence, Its Speed and Economic Growth for Select-ed Countries for 161-2001. The Journal of the Korean Economy, 6(2), 245-273.
  26. Próchniak, M. (2011). Determinants of economic growth in Central and Eastern Eu-rope: the global crisis perspective. Post-Communist Economies, 23(4), 449-468. DOI: 10.1080/14631377.2011.622566.
  27. Ramsey, F.P. (1928). A Mathematical Theory of Saving. The Economic Journal, 38(152), 543-559.
  28. Rapacki, R. & Próchniak, M. (2009). Real beta and sigma convergence in 27 transition countries, 1990-2005. Post-Communist Economies, 21(3), 307-326. DOI: 10.1080/14631370903090616.
  29. Sala-i-Martin, X.X., & Barro, R.J. (1995). Technological diffusion, convergence, and growth (No. 735). Center Discussion Paper.
  30. Siljak, D. (2015). Real economic convergence in the European Union from 1995 to 2013. The Business and Management Review, 6(4), 213-225.
  31. Slaughter, M.J. (1997). Per Capita Income Convergence and the Role of International Trade. National Bureau of Economic Research Working Paper, 5897. DOI: 10.3386/w5897.
  32. Solanko, L. (2003). An empirical note on growth and convergence across Russian re-gions. BOFIT Discussion Paper, 9. DOI: 10.2139/ssrn.1015464.
  33. Solow, R.M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65-94.
  34. Summers, R., & Heston, A. (1988). A new set of international comparisons of real product and price levels estimates for 130 countries, 1950-1985. Review of income and wealth, 34(1), 1-25.
  35. Turganbayev, Y. (2017). Total factor productivity convergence across the Kazakh re-gions. Post-Communist Economies, 29(2), 182-197. DOI: 10.1080/14631377.2016.1267975.
  36. Villarroya, I.S. (2007). Human Capital Convergence in Latin America: 1950-2000. Journal of Iberian and Latin American Economic History, 25(1), 87-122.

Downloads

Download data is not yet available.

Similar Articles

1-10 of 174

You may also start an advanced similarity search for this article.