Testing for Convergence Clubs in Income Per Capita: A Predictive Density Approach

By Fabio Canova. 2004

363 citations recorded by the source corpus.

The article proposes a technique, based on the predictive density of the data, conditional on the parameters of the model, to jointly tests for groups of unknown size in a panel and to estimate the parameters of each group. The procedure is applied to the problem of identifying convergence clubs in scaled income per capita data. The steady-state distribution of European regional data clusters around four poles of attraction with different economic features. The distribution of income per capita of OECD countries has two poles of attraction and each group clearly identifiable economic characteristics. We share the uncommonness of being different. - J. P. Roche

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/bd83657c0c0f9a0367250e25f2c6da3864c60728

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Economic Transition and Growth (2009, background): “As shown in the Appendix, the coe¢ cient a1 in (12) is then a functional of it and xit: In particular, if we assume that the it are independently drawn from some distribution across economies, then a1 can be written in terms of the moment generating function of that distribution, so that for some gi”
Do all countries follow the same growth process? (2009, background): “Contrary to Durlauf and Johnson (1995), Papageorgiou (2002), Canova(2004) ,andSirimaneethamandTemple(2009),weassigncountriestogrowth regimes based on the conditional distribution of the growth rate itself rather than predetermined factors.”
The Determinants of Economic Growth in European Regions (2014, methodology): “and Canova, F. (2001). Inequality and Convergence in Europe’s Regions: Reconsidering European Regional Policies.”
The technology clubs: the distribution of knowledge across nations (2008, background): “…of applied growth scholars, who have recently proposed a range of different economic explanations for the existence of convergence clubs in the world economy (Desdoigts, 1999; Hobijn and Franses, 2000; Johnson and Takeyama, 2001; Papageorgiou, 2002; Fiaschi and Lavezzi, 2003; Canova, 2004).”
Panel Vector Autoregressive Models: A Survey (2013, neutral): “Clearly, with plug-in estimates, the uncertainty present in the posterior of i will be 17 underestimated the estimation error present in and v is disregarded, and one may want to use simple corrections to take these errors into account (see Canova, 2004).”
IDENTIFYING AND I NTERPRETING R EGIONAL CONVERGENCE CLUSTERS ACROSS EUROPE (2005, neutral): “Canova (2004) utilises a predictive density framework to search for the number of convergence clubs in European regional per capita income data. In contrast to Durlauf and Johnson (1995), Canova allows for both inter and intra-regime heterogeneity.”
The contributions of human capital, R&D spending and convergence to total factor productivity growth (2018, background): “Both Canova (2004) and Corrado, Martin, and Weeks (2005) discuss convergence clusters. Canova (2004) proposes that convergence clubs signify the tendency of the income per capita of countries or regions to ‘cluster around a small number of poles of attraction’.”
Technology clubs, technology gaps and growth trajectories (2008, methodology): “This study was subsequently followed and refined by a set of recent empirical works, which aimed at identifying the characteristics and dynamics of convergence clubs by making use of a variety of econometric techniques and by focusing on different types of initial conditions (Desdoigts, 1999; Hobijn”
The evolution of economic convergence in the European Union (2014, neutral): “More recently, Canova (2004) finds separation into convergence clubs along the North-South, rich-poor dimension between 1980-1992, using a predictive density approach and data on NUTS2 Western European regions. Similarly, Corrado, Martin, and Weeks (2005) find no overall convergence in per capita re”
Regional Convergence Clubs in Europe: Identification and Conditioning Factors (2012, neutral): “V 2 t ∼ A L(t)2t2α as t→∞ for some A > 0 (6)”
The Effectiveness of Structural Policy in the European Union: An Empirical Analysis for the EU-15 in 1995-2001 (2005, neutral): “The next subsection explains the often referred to β - and σ -convergence; the following subsection discusses the analyses of Canova (1999), who was most critical of European structural policy.”
The economics of poverty traps and persistent poverty: An asset-based approach (2006, background): “Canova ( 2004 ) shows that countries can be divided into groups or clubs that gravitate toward distinct equilibrium income levels, while Hansen ( 2000 ) identifies critical threshold levels of (initial) per-capita GDP and literacy that divide low from high equilibrium countries.”