Convergence in per capita output: Evidence for South America

Abstract:

The objective of the present article is to analyze empirical evidence in order to compare the hypothesis of convergence in the per capita output of a group of ten economies belonging to the South American region. The study uses data from series over time, during the lapse between 1951 and 2009; it is a transversal study of ten South American countries regarding the gross domestic product per capita for every economy (in US$ constants for 2000) as a measure of the average product per capita using the series set forth in Penn World Tables 7.0 (Summer et al., 2011). Based on the neoclassical theory of economic growth, and especially the model of Solow (1956) with diminishing marginal returns and exogenous technical change, the hypothesis of convergence is contrasted using two of the methods commonly employed for this purpose, which are the absolute beta convergence and the sigma convergence for 1951-2009, as well as other sub-periods, using ordinary least squares (OLS). Results suggest that, on the average, beta convergence existed during 1951-2009. Nevertheless, the evidence by decade shows a trend toward convergence until the end of 1980, which is reverted starting in 1990.

Año de publicación:

2014

Keywords:

• convergence
• Beta convergence
• Sigma convergence
• Per capita output
• Neoclassical theory

Fuente:

scopus