Convergence of Productivity: An Analysis of the Catch‐up Hypothesis within a Panel of States

Abstract

A consensus appears to have emerged in the literature that per capita income levels and/or levels of productivity in the industrialized market economies have converged significantly over the last century, and especially since the end of the second world war (see, e.g., Abramovitz, Baumol, Baumol and Wolff, De Long, Dollar and Wolff, Dowrick and Nguyen). The results of Abramovitz and Baumol, in particular, highlight these trends. They found an almost perfect inverse relation between labor productivity levels in 1870 and the rate of labor productivity growth between 1870 and 1979 among sixteen OECD countries.Abramovitz also investigated subperiods and found that labor productivity convergence was much slower in the period before World War II than after. Indeed, even in the postwar period, there is evidence from Abramovitz and from Baumol and Wolff that productivity convergence slowed during the 1970s, though this is disputed by Dowrick and Nguyen, who find parameter stability in their catch-up model between pre-and post-1973 periods when controlling for growth of factor intensities. Results of De Long show little evidence of productivity convergence over the last century when the sample is no longer restricted to OECD countries. However, Baumol and Wolff, using the Summers and Heston's sample, which covers countries at all levels of development, find convergence in real GDP per capita among the top third or so of the countries over the 1950-81 period, though it was weaker than among OECD countries alone. More recently, Dollar and Wolff find evidence of convergence of to-

The role of energy productivity in U.S. agriculture

“…A more detailed description of the sources and methods can be found in Ball et al (1999Ball et al ( , 2004. The accounts for each state are derived from a panel of annual observations.…”

Agricultural Productivity Growth in Latin America and the Caribbean and Other World Regions: An Analysis of Climatic Effects, Convergence and Catch-up

“…However, applying classical time series methods might lead to the wrong conclusion of the non-stationary of a series because the analysis is not based on structural equations and does not account for the cross-sectional dependence of the data (Westerlund, 2007). Instead, we apply panel data unit root tests, which have been used in just a few productivity studies (e.g., Ball et al, 2004;Suhariyanto and Thirtle, 2001;Ludena, 2010;Liu et al, 2011). In addition, we consider panel data co-integration tests to explore the existence of a long-run uniform trend among CATFP estimates across LAC countries.…”

“…One of the advantages of the Panel unit root tests used here is that they account for both the time-series and cross-sectional dimensions of the data (Westerlund, 12 2007). Another advantage of using panel data unit root tests is that the estimators are normally distributed (Ball et al, 2004).…”

Effects of Greenhouse Gas Mitigation on Drought Impacts in the United States

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