Terence Tai-Leung Chong, Melvin J. Hinich, Venus Khim-Sen Liew and Kian-Ping Lim
Economics Letters, Elsevier, 100(3), 337-339
Publication year: 2008

Abstract

This paper revisits the income convergence hypothesis by using the nonlinear unit root test of Kapetanios et al. [Kapetanios, G., Shin, Y. and A. Snell, 2003. Testing for a unit root in the nonlinear STAR framework. Journal of Econometrics 112, 359–379.]. Out of the 12 OECD income gaps in which nonlinearity has been detected, two cases of long-run converging and four cases of catching up are found.

Keywords

OECD; Long-run convergence; Catching up; Nonlinear unit root test