The poor stay poor: Non-convergence across countries and regions

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Canova, Fabio; Marcet, Albert. The poor stay poor: Non-convergence across countries and regions. 1995
To cite or link this document: Canova, Fabio Marcet, Albert
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa 1995-10-01
dc.description.abstract We study the issue of income convergence across countries and regions with a Bayesian estimator which allows us to use information in an efficient and flexible way. We argue that the very slow convergence rates to a common level of per-capita income found, e.g., by Barro and Xavier Sala-i-Martin, is due to a 'fixed effect bias' that their cross-sectional analysis introduces in the results. Our approach permits the estimation of different convergence rates to different steady states for each cross sectional unit. When this diversity is allowed, we find that convergence of each unit to (its own) steady state income level is much faster than previously estimated but that cross sectional differences persist: inequalities will only be reduced by a small amount by the passage of time. The cross country distribution of the steady state is largely explained by the cross country distribution of initial conditions.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 137
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.title The poor stay poor: Non-convergence across countries and regions
dc.type info:eu-repo/semantics/workingPaper 2016-06-04T02:50:14Z
dc.subject.keyword Macroeconomics and International Economics
dc.rights.accessRights info:eu-repo/semantics/openAccess

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