Time-series tests of income convergence with two structural breaks: evidence from 29 countries

John W. Dawson, Mark C. Strazicich
2010 Applied Economics Letters  
This article uses data on real per capita incomes from 1900 to 2001 to test for stochastic convergence in a diverse group of 29 countries. We utilize LM unit root tests to endogenously determine the number and location of structural breaks for each country. These tests avoid spurious rejections that can occur in Dickey-Fuller-type endogenous break tests used in many previous studies. We find significant evidence that incomes are stochastically converging in 23 of the countries, with World War
more » ... most often identified as the time period of structural breaks.
doi:10.1080/13504850802584807 fatcat:yiov54ww2nbrtkup7xjtmz4t5q