Abstract
Abstract This paper reviews the results of a number of empirical studies of convergence among the OECD countries and discusses some limitations of these studies. Moreover, the paper tries to deal with these limitations by presenting a new and more appropriate methodology: quantile regressions. The results obtained with this specification support the view that, even among the OECD countries, there are different clusters. The parameter representing the convergence hypothesis, despite being negative in every case, is higher in value and more significant as we advance to higher quantiles. These outcomes reveal a faster convergence between the countries that belong to the upper quantiles. Moreover, 1960–1970 is highlighted as the period in which convergence was more intense.
Highlights
Since Barros (1991) pioneering proposals, the phenomenon of economic convergence between countries has been widely and empirically studied
The idea underlying the concept of convergence, based on the neoclassical theory, is that, given the existence of decreasing returns in the use of capital and assuming equality of preferences and technology, countries which begin with lower levels of income per capita will tend to grow more quickly
Empirical issues have played a key role in the literature on convergence using different kinds of data and different estimations to test the hypothesis
Summary
Since Barros (1991) pioneering proposals, the phenomenon of economic convergence between countries has been widely and empirically studied. These studies use the exogenous theory because it is the theory from which the concept of convergence arises. Each country would attain its own steady state but, in the meantime, its differences in per capita income would tend to diminish.1 This theory predicts a process of catching-up (conditional convergence). Another possible solution can be observed when rich and poor countries reach the same steady state of income level, which forms the strict definition of convergence (absolute or unconditional).
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
