Time Series Tests of Income Convergence with Two Structural Breaks: An Update and Extension
نویسندگان
چکیده
This paper uses newly available long-span data on real per capita incomes from 1900-2001 to test for stochastic convergence in a diverse group of 29 countries. To perform our tests, we utilize the two-break LM unit root test of Lee and Strazicich (2003) and endogenously determine two distinct structural breaks in level and trend for each country. Despite including both OECD and non-OECD countries, we find significant evidence that incomes are stochastically converging in 23 of the 29 countries. World War II is the most often identified time period of structural breaks in relative income. JEL classification: O40, C12
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