Per Capita Income Distribution: Linking Theory to Empirics
36 Pages Posted: 23 Sep 2008
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: Suggested Citation
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