Abstract

RODRIGUEZ BENAVIDES, Domingo; MENDOZA, Miguel Ángel  and  PERROTINI, Ignacio. Non-Linear Analysis of Regional Convergence in Latin America, 1950-2010: A Panel Data TAR Model. Prob. Des [online]. 2015, vol.46, n.182, pp.119-142. ISSN 0301-7036.  https://doi.org/10.1016/j.rpd.2015.06.004.

This paper analyzes the hypothesis of regional convergence in Latin America through a non-linear growth model for the time period 1950-2010. The methodology combines three approaches: the threshold autoregressive model (TAR), panel data unit root tests and calculating critical values with a bootstrapping simulation. The results of the tests applied to the per capita gross domestic product (GDP) of two groups of countries in Latin America (the wealthiest and then all nations in the region) suggest that the linear model is superior to the non-linear model and show no evidence of partial or absolute convergence. We did not identify a group of countries in the region with higher per capita income that would behave as a leading economy. Our results cast doubt on other studies conducted with linear tests that did find conditional convergence in some countries in the region.

Keywords : Economic growth; convergence/divergence; panel data TAR model; linear and non-linear estimation methods; econometric models.

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