It's still 2%: evidence on convergence from 116 years of the US States panel data

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: A new debate over the speed of convergence in per capita income across economies is going on. Cross sectional estimates support the idea of slow convergence of about two percent per year. Panel data estimates support the idea of fast convergence of five, ten or even twenty percent per year. This paper shows that, if you ``do it right'', even the panel data estimation method yields the result of slow convergence of about two percent per year.

Keywords: income convergence; panel data estimation; biases; maximum likelihood; US states (search for similar items in EconPapers)
JEL-codes: C23 O40 O51 (search for similar items in EconPapers)
Date: 1997-09
New Economics Papers: this item is included in nep-dcm
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:236

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