TY - JOUR
AU - Bernard,Andrew B.
AU - Durlauf,Steven N.
TI - Convergence of International Output Movements
JF - National Bureau of Economic Research Working Paper Series
VL - No. 3717
PY - 1991
Y2 - May 1991
UR - http://www.nber.org/papers/w3717
L1 - http://www.nber.org/papers/w3717.pdf
N1 - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH 03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu
Steven N. Durlauf
Department of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI 53706-1393
Tel: 608/263-3859
Fax: 608/262-2033
E-Mail: sdurlauf@ssc.wisc.edu
AB - This paper explores the convergence of real per capita output in advanced industrialized economies. We start by observing that in a stochastic environment. convergence in per capita GDP requires that permanent shocks to one econ~ be associated with permanent shocks to other economies. Convergence is a natural outcome, of models where exogenous technical change migrates across countries with similar microeconomic specifications. Conversely, in a world where some component of permanent output movements is due to technical change whereas other components are due to domestic factors. national economies may diverge over time. we formalize a general definition of convergence using the notions of unit roots and cointegration developed in the time series literature. We construct bivariate and multivariate tests of convergence across advanced industrialized economies. Our evidence indicates that one cannot reject the no convergence null. Further. the estimated time series representation of cross-country output deviations exhibits substantial persistence. These results suggest that previous empirical work on convergence has neglected some aspects of the null hypothesis.
ER -