All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC
ralph lauren polo

 
Ahmet Ozyigit
 
''Income convergence in latin america in a smooth transition autoregressive framework: evidence from brazil, mexico, chile and costa rica''
( 2009, Vol. 29 No.4 )
 
 
This study investigates the income convergence hypothesis between Mexico, Brazil, Chile and Costa Rica using a unit root test developed by Kapetanios, Shin and Snell (2003) (KSS) which tests the joint null hypothesis of linearity and a unit root against a nonlinear stationary process. In a Smooth Transition Autoregressive (STAR) framework, this study shows that the income gaps of Brazil, Chile and Costa Rica with respect to Mexico are nonlinear but stationary with significant trend effect, implying the Latin countries have not achieved a long-run steady state with respect to income convergence, but rather, are catching up with Mexico.
 
 
Keywords: Income convergence, non-linear income gap, non-linear stationary test, KSS test, Long-run steady state convergence, catching-up, Latin American income gap
 
Manuscript Received : Dec 17 2009 Manuscript Accepted : Dec 18 2009

  This abstract has been downloaded 548 times                The Full PDF of this paper has been downloaded 87714 times