PANIC Results

Abstract

The analysis of stochastic convergence via PANIC provides strong evidence of convergence patterns in the series of log TFP, as given by the existence of pairwise cointegration among individual series, as well as weaker evidence of convergence in real GDP per worker and average annual hours worked (which exhibited two common stochastic trends) and yet weaker evidence of convergence in real physical capital per worker and human capital (which exhibited three common stochastic trends). As for the analysis of deterministic convergence, there is some evidence of convergence in real GDP per worker and average annual hours worked, and to a lower extent in real physical capital per worker and human capital, but the evidence for log TFP points to a lack of deterministic convergence.