Convergence Hypothesis Research Articles

Productivity Convergence and Divergence in Latin America, 1970-2014

The paper examines Latin American countries’ productivity growth levels and their convergence patterns utilizing nonparametric frontier approaches. Utilizing a sample of 17 Latin American countries for the period 1970-2014 it estimates various productivity indexes alongside with their main components. Moreover a convergence analysis is conducted estimating relative productivity convergence paths. The results suggest that over the period examined, countries’ productivity growth levels have contracted. We provide evidence that the implementation of the structural reforms of the 1990s do not appear to have driven Latin American countries to higher productivity levels. Moreover, the results do not render support to the productivity convergence hypothesis. On the other hand, some support was found for countries’ technological change levels, identifying three convergence clubs.

Semi-analytic treatment of mixed hyperbolic–elliptic Cauchy problem modeling three-phase flow in porous media

This work provides a technical applied description of the residual power series method (RPSM) to develop a fast and accurate algorithm for mixed hyperbolic–elliptic systems of conservation laws with Riemann initial datum. The RPSM does not require discretization, reduces the system to an explicit system of algebraic equations and consequently of massive and complex computations, and provides the solution in a form of Taylor power series expansion of closed-form exact solution (if exists). Theoretically, convergence hypotheses are discussed, and error bounds of exponential rates are derived. Numerically, the convergence and stability of approximate solutions are achieved for systems of mixed type. The reported results, with application to general Cauchy problems, which rise in diverse branches of physics and engineering, reveal the reliability, efficiency, and economical implementation of the proposed algorithm for handling nonlinear partial differential equations in applied mathematics.

ОСОБЕННОСТИ ВОЗНИКНОВЕНИЯ И РАЗВИТИЯ НАЛОГОВОГО МОНИТОРИНГА В РОССИЙСКОЙ ФЕДЕРАЦИИ

The features of the emergence and development of tax monitoring in the Russian Federation are considered. The article forms a system of key features of tax monitoring in the Russian Federation; outlines the prospects for further development of tax monitoring in the Russian Federation; confirms the hypothesis of convergence of interests of tax administrators and taxpayers in order to ensure an effective state tax policy. The goal is to form a system that makes up the key features of tax monitoring in the Russian Federation, and to prove the hypothesis of convergence of interests of tax authorities and taxpayers in the digital economy. The subject of the research is a complex of issues related to the prerequisites for the emergence and current state of a new form of interaction between tax authorities and taxpayers based on the transformation of the traditional model of tax administration. The hypothesis of the study is that the mechanism of modern transformations in tax administration is the convergence of the interests of tax administrators and taxpayers in order to ensure an effective state tax policy. The disclosure of the subject area of research is accompanied by the use of various methods (hypothetical method, comparison, analysis, generalization, historical method, and others). Regulatory legal acts and special literature were used as materials for the study.

Provincial income convergence clubs in Indonesia: Identification and conditioning factors

AbstractThe discussion on regional income per capita convergence in Indonesia continues with an emphasis on whether regional per capita incomes tend to converge or diverge over the long run. This study evaluates the regional convergence hypothesis at the provincial level during the recent deindustrialization period 2001–2017 of Indonesia. First, the study examines the existence of convergence clubs in Indonesia using a recently assembled panel dataset. Results reveal four convergence clubs with particularly large income gaps, mostly arising from the top of the income distribution. Second, using an ordered logit model, the study examines the determinants of the convergence clubs. Result reveals that industrialization increases the probability of membership to a high‐income club.

Progress in child stunting across the world from 1990 to 2015: testing the global convergence hypothesis.

This study has two-fold objectives: first, to test the global convergence hypothesis in the progress of child stunting across 174 countries over the period 1990-2015; second, to identify factors determining the process of convergence or divergence. The study design comprises macro-level cross-country analyses. Our empirical strategy uses parametric convergence models such as absolute and conditional β-convergence models, while non-parametric convergence models such as Kernel density plots serve as robustness checks. The study uses a global setting comprising child stunting information from 174 countries. The participants for this study are 174 countries. The information on child stunting prevalence for most countries is available from the UNICEF-WHO-WB Joint Child Malnutrition Estimates Expanded Database (April-2019), while national-level surveys are used for those countries where UNICEF-WHO-WB Database is not available. The data for socio-economic variables are taken from the World Bank's data bank (1990-2015). Findings from the absolute β-convergence model estimates show that progress in child stunting has diverged over the entire period (1990-2015). However, the speed of divergence has reduced for the recent period (2010-2015). The conditional β-convergence model estimates show that cross-country heterogeneity in GDP per capita, poverty and health care expenditure are significant factors explaining divergence in child stunting. For replacing current divergence with convergence in child stunting worldwide, the study demonstrates the critical role of economic factors and public spending on health care to reduce child stunting, particularly in countries where progress is slow.

Output convergence at sector level across Indian states: Evidence from weak sigma and club convergence analysis

AbstractThe study assesses the per capita output (PCO) convergence hypothesis across 33 Indian states/Union‐Territories at the aggregate and sectoral level by using weak‐sigma and clustering‐algorithm convergence tests for the period of 2011–2012 to 2018–2019. Results from the weak‐sigma convergence test show mixed evidence. This suggests that Indian states are not converging to single steady‐state. Further, results revealed the existence of multiple club‐convergence at aggregate and sectoral level after applying the clustering‐algorithm test. Results also show that the service sector is converging faster than the industry and agriculture sectors. Our findings recommend that sector‐specific policies need to be adopted to boost the aggregate PCO at club level.

Convergence theory and conditional income convergence among sub‐Saharan African countries

AbstractThis article examines the hypothesis of conditional convergence in income per person for sub‐Saharan African (SSA) countries over the most recent twenty‐five‐year period, 1990–2014, including examining the effects of new conditioning variables. This study uses new data from the Penn‐World Table 9.0 on per capita income and income growth which recently became available in purchasing‐power‐parity (PPP$) 2011 dollars. This is the first article to use this data to research convergence of per capita income in SSA. The study also identifies new conditioning variables and includes them in the econometric model of growth. The main results are for the largest 35 SSA countries, and they include: Average per capita income in 2011 PPP$ grew at 1.6% over the period of 1990–2014; and conditional convergence is occurring, that is, countries lagging behind in 1990 grew faster. Further, instrumenting the starting year value of per capita income increases the rate of convergence by 50%. The strongest finding throughout was for share of labor in agriculture, indicating that countries with a larger share of agriculture in 1990 grew slower. It also finds that countries located on the ocean and with a higher literacy rate tend to grow faster, while countries with higher life expectancy grew slower. External support for new agricultural technology or increased nutrition and food availability that increases agricultural productivity would reduce the share of labor in agriculture and increase future growth performance.

Economic Freedom And Endogenous Economic Growth

The relation between economic freedoms and economic performance is very crucial to determine economic growth and to the development policies of a country. Economic development and growth are the ultimate goal for all developed and emerging economies. Economic developed countries have been aiming to sustain their current situation, while developing countries apply policies that will provide economic growth and development. Convergence hypothesis which is the one of the main inference of Solow growth model states that, in a close economy, real income difference across countries tends to decrease because of the diminishing rate of return of capital. The concept of "economic freedoms" is one of the driving elements of economic growth and development. This study tests empirically economical freedom foster macroeconomic growth in an endogenous growth model. Panel data is used in covering 159 countries for the period of 1995-2014 via nonlinear least square methods. Findings suggest that there is significant relation between economical freedom and per capita growth. JEL Classification: E2, O43, O47, D02, E10

Club convergence in European housing prices: The role of macroeconomic and housing market fundamentals

This study aims to determine whether there is convergence in house prices across a sample of European economies, including members and non-members of the Eurozone. Overall the literature has found no evidence of convergence of house prices across Europe. Using data from twelve countries over the time period 2004Q2 to 2016Q3 we test for the null hypothesis of convergence against an alternative of divergence (or club convergence) and apply a Bayesian dynamic panel model to determine house price dynamics and drivers. The results suggest the presence of five housing market clubs across Europe but there is no evidence of a Eurozone club. In addition we find that the main determinants of real house prices are mainly fiscal factors and unemployment. Given the significance of housing markets to the economy and stability of the financial system, the Eurozone may wish to consider measures that facilitate convergence across members’ housing markets.

Exploring the convergence of per capita electricity consumption in ASEAN countries: a spatial econometric analysis

ABSTRACT The convergence of per capita electricity consumption has attracted policy-makers because it provides many important suggestions for common regional policies. However, the convergence hypothesis has much less attention in the emerging country. The study aims to identify a potential absolute-convergence hypothesis of per capita electricity consumption in 10 ASEAN countries from 1980 to 2018. The empirical result by applying a spatial econometric analysis showed that the absolute beta convergence hypothesis of per capita electricity consumption is valid for the ASEAN community context. The findings would provide ASEAN members with more insights to plan sustainable energy development strategies.

Club convergence of per capita disposable income in the United States

AbstractThis paper examines the long‐run trends in per‐capita income across the US states (1995–2018). Contrary to the majority of the literature on income convergence, which uses pre‐tax income as the variable of reference, we focus on per‐capita disposable household income. This enables us to better identify any convergence pattern. We apply the Phillips and Sul (2007, 2009) convergence methodology to check the existence of club convergence across the United States and within the Bureau of Economic Analysis (BEA) regions. Our findings confirm the club convergence hypothesis and highlight the role of tax policy in reducing regional disparities.

Empirical Study on the Prospects of Asean's Trade and A Single Currency

The paper seeks to explain the nature and prospects of trade and monetary integration in ASEAN during 1990-2017.Growth,structural breaks of Intra export and intra import shares of ASEAN including external trade were shown and influencing factors like GDP, FDI, REER,openness and inflation were regressed with them. Short run and long run causalities were observed among the said variables through cointegration and vector error correction models.Monetary integration was explained through capital market development especially in share and bond markets and in currency convertibility. Optimum currency area criterion was tested through Beta and Sigma convergence hypothesis which proved that the adoption of single currency in ASEAN is now not feasible.

The impact of globalization on the ecological footprint: do convergence clubs matter?

In this paper, we examine the impact of globalization on ecological footprint within the framework of the environmental convergence hypothesis for 130 countries over 1980-2016. To do so, we follow a two-stage empirical procedure. First, we test the overall convergence in ecological footprint across countries and identify possible convergence clubs using the nonlinear time-varying factor model developed by Phillips and Sul (2007). Then, we perform panel unit-root and panel cointegration tests used under the presence of cross-sectional dependence to analyze the impact of globalization and economic growth on the ecological footprint both for the full panel sample and convergence clubs. Finally, we estimate long-run coefficients using the Common Correlated Effects Mean Group (CCE-MG) and Augmented Mean Group (AMG) techniques. The club clustering algorithm identifies five convergence clubs, each converging to a different ecological footprint level. The results show cointegration between variables for the full panel sample and two of the five convergence clubs. Furthermore, there is no significant relationship between ecological footprint and globalization, whereas economic growth is significantly and positively related to the ecological footprint for full panel sample and one of the five convergence clubs. In other words, the impact of globalization and economic growth on ecological footprint differs across full panel sample and convergence clubs.

Are candidate countries converging with the EU in terms of the Copenhagen political criteria?

ABSTRACT The Copenhagen criteria for EU accession are the essential preconditions that candidate countries must satisfy to be deemed eligible for membership. In line with the strand of the literature that focuses on candidate countries’ convergence with the EU, the paper examines whether converge with the EU in terms of the Copenhagen political criteria can be established empirically for candidate and potential-candidate countries. Currently, the candidate country status is granted to Albania, North Macedonia, Montenegro, Serbia and Turkey. Bosnia–Herzegovina and Kosovo are recognized by the EU as potential candidate countries. In addition to the candidate and potential candidate countries, we include in the convergence tests the six countries of the Eastern Partnership EU policy: Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine. Using unit root tests, convergence is examined in terms of two indices drawn from the Varieties of Democracy (V-Dem) project: the Liberal democracy and the Civil liberties indices. The findings reported herein, are not uniform and on the whole offer only scant evidence in favour of the convergence hypothesis. For some of the candidate and potential candidate countries convergence is established, while for others the results do not point to such a process.

Convergence in per capita carbon footprint and ecological footprint for G7 countries: Evidence from panel Fourier threshold unit root test

This paper aims to explore the convergence of per capita carbon and ecological footprints in G7 countries during 1961–2016. For this purpose, we propose a new unit root test in the panel setting–the panel Fourier threshold unit root test. This test takes into consideration both multiple smooth structural changes and nonlinearity. According to the literature, the power of the nonlinear unit root tests is reduced in the case of ignoring structural breaks. Therefore, we expect to get more reliable empirical findings by utilizing this methodology. The empirical results of this paper show that these series have nonlinear behaviors for the period 1961–2016. Furthermore, they demonstrate that the absolute convergence hypothesis is valid in G7 countries for both regimes. Thus, governments can conduct common environmental policies, including international climate summits and agreements, instead of national-based policies to mitigate environmental deterioration in their countries.

Türkiye’de Bölgeler Arasında Gelir Eşitsizliği Yakınsaması Var Mı? Panel Veri Analizi

In recent years, with globalization and technological change, it is seen that income inequality has increased in many economies. Therefore, the concept of income inequality is one of the issues that attract attention by researchers. There are many studies on income inequality in the literature. In terms of fiscal policy, the relationship with economic growth is tested, or with financial development. In this study, the validity of the stochastic convergence hypothesis of income inequality is desirable to test for interregional in Turkey. For this purpose, the stationarity test of income inequality was carried out with the panel unit root test. Coefficient of income inequality which expressed as Gini covers the period 2006-2019 and this coefficient to Turkey Statistical Institute has been accessed from the official database. As a result of the panel unit root analysis performed for 12 Regions (Level 1) according to the classification of statistical region units, it was concluded that the Gini coefficient was not stationary. So the hypothesis of convergence between regions in Turkey is not available and there is an imbalance in the distribution of income. Therefore, a lot of work falls on policy makers to ensure justice in income distribution.

Task and Informational Constraints on Search Strategies: Testing the Idea of Convergence to Tolerant Regions

The experiment reported was designed to investigate the interaction of information and force variability on the evolving search strategy, specifically testing the hypothesis of convergence to tolerant regions. Participants were required to produce proportional bimanual isometric force output over three days of practice, with no prespecified force target and where performance was more tolerant to force variability at higher forces. The duration of intermittent visual feedback was manipulated to test the effects of information and force variability on the search process and the resulting sensitivity to tolerant regions of the task space. The findings showed that just under half of the participants exploited more tolerant regions and that this was predicted by the initial force conditions. Different characterizations of the individual search patterns were also predicted by inherent force-dependent variability and initial force conditions. Visual intermittency feedback did not affect the time-dependent properties of the search process but did influence the within-trial variability. Our findings suggest that the attraction to tolerant regions needs to be considered within the interactions of the different categories of constraints on the search process.

Gender convergence or divergence in the relationship between late-life depression and multiple stressors: evidence from a national survey in China

ABSTRACT This study aimed to investigate gender convergence or divergence among older adults in China, a Confucian society with strong persistence of gender role differentiation. We examined how multiple stressors influence depression simultaneously, with gender comparison approach. The data were drawn from the China Longitudinal Aging Social Survey study (N = 8,097). Results indicated that older women reported significantly higher levels of depression than men, yet overall depressive symptoms showed many gender similarities. Surprisingly, our analyses supported the hypothesis of gender convergence in stressors predicting late-life depression. Recommendations for practice and further research priorities based on findings are discussed.

Disparities and Regional Convergence of Literacy Rate in India: A Spatial Econometric Approach

Income growth and convergence also known as the catch-up effect has been studied extensively in the literature and become a topic of considerable interest in both developing and developed economies. The purpose of this paper is to study empirically the evolution of the disparities between Indian districts considering the spatial dependence and to explore a non-parametric approach for characterizing convergence of literacy rate. This study utilizes growth theory as the theoretical foundation to explore the convergence hypothesis. The methodology consists in identifying the shape of the long run spatial associations through the use of Markov chains which make it possible to derive a unique stationary distribution. The results of the analysis indicate the persistence of regional disparities and the importance of geography to explain the global convergence process with positive spatial spillover effects. The proportion of high-income districts surrounded by similar districts has significantly increased detrimentally to the other spatial associations. This non-parametric approach complements the standard parametric method (absolute and conditional Beta-convergence) which shows that convergence process can be accelerated by beneficial spatial interaction effects. These results have strong policy implications with regard to national and territorial policies in these districts.

Maritime Business Cycles with Multiple Structure Changes

In this paper we examined a novel extension of the convergence empirics for the maritime business cycle which considers structure breaks and/or changes. To provide theoretical justification, the convergence hypothesis uses the relaxed assumption to technology shocks. Based on the recent empirical results provided by Kim and Chang (2020), we consider nonlinear dynamics that capture the properties on structural changes in the equilibrium adjustment process. This approach bridges the gap between the theoretical framework and empirical specifications. In particular, we applied the convergence hypothesis to the multiple structure change model for the maritime business cycle. Our application to the maritime data showed support of the convergence hypothesis allowing multiple structure changes during the high volatile period and offers additional insight into the forecasting maritime business cycles.