Are incomes converging among OECD countries? Time series evidence with two structural breaks

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Mark Strazicich Ph.D., Professor (Creator)
Appalachian State University (ASU )
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Abstract: Time series from fifteen OECD countries for the period 1870–1994 are examined to determine if per capita incomes are stochastically converging. To perform our tests, we utilize a minimum Lagrange multiplier unit root test that endogenously determines two structural breaks in level and trend. In contrast to other tests, our test is not subject to rejections of the null in the presence of a unit root with break(s). Overall, our empirical findings provide significant evidence to support that incomes are stochastically converging. One or two permanent breaks in relative income are identified for each country, most often around the two World Wars.

Additional Information

Strazicich, M.C., Lee, J., & Day, E. (2004). Are Incomes Converging Among OECD Countries? Time Series Evidence with Two Structural Breaks. Journal of Macroeconomics, 26(1): 131-145 (March 2004). Published by Elsevier (ISSN: 0164-0704).
Language: English
Date: 2004

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