The Mirage of Convergence: Why Poor Countries May Only Seem to Be Closing the Income Gap

CERGE-EI Working Paper No. 222

Posted: 27 Apr 2005

See all articles by Jan Hanousek

Jan Hanousek

Faculty of Business and Economics, Mendel University in Brno; Centre for Economic Policy Research (CEPR)

Dana Hajkova

Organization for Economic Co-Operation and Development (OECD)

Randall K. Filer

City University of New York, CUNY Hunter College - Department of Economics; Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences; University of Michigan at Ann Arbor - The William Davidson Institute; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 2004

Abstract

Results of numerous cross-country growth regressions have been found to be sensitive to specification, time period or sample coverage. Several authors have observed that results may depend on the source and data collection methods for right-hand side variables. In this paper, we suggest that a more fundamental problem may exist with respect to the growth rates used in the majority of studies. Differences in measured growth rates are severe across widely-used sources. More critically, these differences are correlated with countries' level of development. As an illustration, we show that the results of two recent studies depend critically on which data set is used to derive the growth measure.

Keywords: Growth, measurement, developing economies

JEL Classification: C82, O47

Suggested Citation

Hanousek, Jan and Hajkova, Dana and Filer, Randall K., The Mirage of Convergence: Why Poor Countries May Only Seem to Be Closing the Income Gap (October 2004). CERGE-EI Working Paper No. 222, Available at SSRN: https://ssrn.com/abstract=708168

Jan Hanousek (Contact Author)

Faculty of Business and Economics, Mendel University in Brno ( email )

Brno
Czech Republic

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Dana Hajkova

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Randall K. Filer

City University of New York, CUNY Hunter College - Department of Economics ( email )

695 Park Avenue
Hunter West 1502
New York, NY 10021
United States
212-772-5499 (Phone)

HOME PAGE: http://econ.hunter.cuny.edu/faculty/filer/

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic
42 02 240 05 213 (Phone)
42 02 242 27 143 (Fax)

HOME PAGE: http://www.cerge-ei.cz

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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