Per Capita Income Distribution: Linking Theory to Empirics

36 Pages Posted: 23 Sep 2008

See all articles by Leone Leonida

Leone Leonida

University of London; University of Messina

Annalisa Marini

University of Bristol

Date Written: September 2008

Abstract

The present work analyzes convergence issues on a sample of international countries. By using nonparametric and semiparametric techniques, evidence of club convergence is found. Multimodality and persistence is a result emerging from the study of both real data and steady-state solutions. Thus, divergence and polarization in income distribution are due to the structural characteristics of economies, rather than to transitional dynamics. Besides, simulations show that multimodality is due to fundamentals and the implementation of not efficient policies. Finally, the most important contribution of this work is due to the first utilization of transition matrices in causal terms, so that we can investigate the reasons for cross-country divergence.

Keywords: Catch-Up, Convergence Club, Distribution Dynamics, Multimodality, Neoclassica Growth Theory

JEL Classification: O40, O47, O57

Suggested Citation

Leonida, Leone and Marini, Annalisa, Per Capita Income Distribution: Linking Theory to Empirics (September 2008). Available at SSRN: https://ssrn.com/abstract=1271915 or http://dx.doi.org/10.2139/ssrn.1271915

Leone Leonida

University of London ( email )

Mile End Road
London, E1 4NS
United Kingdom

University of Messina ( email )

Piazza Pugliatti, 1
Messina, 98122
Italy

Annalisa Marini (Contact Author)

University of Bristol ( email )

8 Woodland Road
Bristol BS8 ITN
United Kingdom

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