Pairwise Output Convergence in Selected Countries of East Asia and the Pacific: An Application of Stochastic Unit Root Test

By Chowdhury, Khorshed; Mallik, Girijasankar | Journal of Southeast Asian Economies, April 2011 | Go to article overview

Pairwise Output Convergence in Selected Countries of East Asia and the Pacific: An Application of Stochastic Unit Root Test


Chowdhury, Khorshed, Mallik, Girijasankar, Journal of Southeast Asian Economies


I. Introduction

The concept of convergence is defined in the literature as implying "forces accelerating the growth of nations who were latecomers to industrialization and economic development give rise to a tendency towards convergence of levels of per capita product or, alternatively of per worker product" (Baumol 1986, p. 1075). David Hume contended that transfer of technology to be a driving force for convergence of poorer and richer countries by enlarging the size of their markets. Convergence of income is a natural outcome of the neoclassical growth models, and its validity is of paramount importance for economic welfare. The empirical as well as the theoretical literature on convergence is vast, and a comprehensive review can be found in Islam (2003) with a mixed bag of results. Islam (2003, p. 309) attributes the wide array of empirical results due to many different interpretations of convergence. The following taxonomy indicates some of the different ways in which convergence has been understood:

(a) Convergence within an economy vs. convergence across economies;

(b) Convergence in terms of growth rate vs. convergence in terms of income level;

(c) [beta]-convergence vs. [sigma]-convergence;

(d) Unconditional (absolute) convergence vs. conditional convergence;

(e) Global convergence vs. local or club-convergence;

(f) Income-convergence vs. TFP (total factor productivity)-convergence; and

(g) Deterministic convergence vs. stochastic convergence.

Islam (2003, p. 16) writes about the progression of the study of convergence as follows:

   From a chronological point of view, the study of
   convergence began with the notion of "absolute
   convergence" and then moved to the concept of
   "conditional convergence." Both these concepts
   were initially studied using the notion of
   "[3-convergence." The notion of o-convergence
   arose later. Alongside emerged the concepts of
   "club-convergence," "TFP-convergence," and the
   time series notions of convergence. There was
   also a chronological progression from the
   "informal cross-section" to "formal cross-section,"
   and then on to "panel" approach to
   convergence study. The "time-series" and the
   "distribution" approaches developed alongside.

For large samples of countries that cut across regions and income levels, most of the evidence fails to support absolute convergence. Although large samples of countries do not display convergence, the evidence of convergence is somewhat stronger for smaller groups of countries specially among countries at similar income levels. Ben-David (1998) and Chatterji (1992) find empirical evidence of convergence among the world's "poorest" and "wealthiest" countries although they fail to do so for middle-income countries. In response to Ben-David (1998) and Chatterji (1992), Chowdhury (2005a, 2005b) tested the "bi-modality" and failed to find absolute and conditional convergence in poorer countries of South Asia and middle income counties of ASEAN. Galor (1996) and Quah (1997) provide theoretical justifications for the convergence club hypothesis, according to which convergence will occur among subsets as opposed to broad samples of countries.

The central objective of this study is to empirically examine convergence in eleven countries of East Asia and the Pacific region. Our sample included the economies of Australia, New Zealand, Japan and the newly industrializing economies (NIEs) of Hong Kong, Singapore, South Korea, Taiwan (Asian tigers) along with emerging economies of Indonesia, Malaysia and the Philippines (the tiger cubs). Some of these economies, specially the tigers, have been hailed as models of achievement for other emerging economies. The sample included countries which are territorially small (Singapore and Hong Kong) and also countries which are big territorially (Australia, Indonesia). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Pairwise Output Convergence in Selected Countries of East Asia and the Pacific: An Application of Stochastic Unit Root Test
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.