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Convergence: Theory, Econometrics, and Empirics

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Development Patterns of Material Productivity

Part of the book series: Contributions to Economics ((CE))

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Abstract

This chapter presents the theoretical background, the econometrics, and some empirical evidence with regard to convergence. Section 4.1 presents the basic Solow–Swan model, the starting point for analyses of convergence as well as the convergence properties in Schumpeterian models of endogenous growth. Section 4.2 discusses the econometric methods for examining convergence applied in this analysis. Those include growth regressions, (dynamic) panel approaches in terms of fixed effects models as well as panel unit root tests (Im, Pesaran, and Shin as well as Maddala and Wu/Choi). This chapter concludes with a review of empirics of convergence of different economic variables like for instance per capita income, labor productivity, energy productivity, or CO2 emissions.

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Notes

  1. 1.

    If initially k = 0 it will remain zero. This possibility is ignored here.

  2. 2.

    For more details on the strong version of time series convergence, see Hemmer and Lorenz (2004).

  3. 3.

    For the following, see Breitung and Pesaran (2008).

  4. 4.

    An overview of the development of methods to treat cross-section dependence in large panels can also be found in Breitung and Persaran (2008, pp. 295–297). Reasons for cross-section dependence include omitted observed common factors, spatial spillover effects, unobserved common factors, and general residual interdependence.

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Authors and Affiliations

  1. Faculty of Business, Economics and Social Sciences, University of Hohenheim, Stuttgart, Germany

    Larissa Talmon-Gros

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  1. Larissa Talmon-Gros
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Talmon-Gros, L. (2014). Convergence: Theory, Econometrics, and Empirics. In: Development Patterns of Material Productivity. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-02538-4_4

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