Cross Sectional and Panel Estimation of Convergence

JA Goddard; John Ogilvie Stephen Wilson

doi:10.1016/S0165-1765(00)00387-6

Cross Sectional and Panel Estimation of Convergence

JA Goddard, John Ogilvie Stephen Wilson

Centre for Responsible Banking and Finance

Research output: Contribution to journal › Article › peer-review

15 Citations (Scopus)

Abstract

Cross sectional estimation of convergence regressions is known to be hazardous if there is convergence towards heterogeneous steady state values. In this paper, Monte Carlo methods are used to investigate the implications of this parameter heterogeneity problem; The cross sectional and pooled OLS estimators are compared with a panel estimator which is unaffected by heterogeneity. If there is heterogeneity, the latter outperforms both the unconditional and conditional cross sectional and pooled OLS estimators. (C) 2001 Elsevier Science B.V. All rights reserved.

Original language	English
Pages (from-to)	327-333
Number of pages	7
Journal	Economics Letters
Volume	70
Issue number	3
DOIs	https://doi.org/10.1016/S0165-1765(00)00387-6
Publication status	Published - Mar 2001

Keywords

panel data
unit roots
convergence
ECONOMIC-GROWTH
DYNAMIC-MODELS
COUNTRIES
EMPIRICS

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/S0165-1765(00)00387-6

Cite this

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AU - Goddard, JA

AU - Wilson, John Ogilvie Stephen

PY - 2001/3

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AB - Cross sectional estimation of convergence regressions is known to be hazardous if there is convergence towards heterogeneous steady state values. In this paper, Monte Carlo methods are used to investigate the implications of this parameter heterogeneity problem; The cross sectional and pooled OLS estimators are compared with a panel estimator which is unaffected by heterogeneity. If there is heterogeneity, the latter outperforms both the unconditional and conditional cross sectional and pooled OLS estimators. (C) 2001 Elsevier Science B.V. All rights reserved.

KW - panel data

KW - unit roots

KW - convergence

KW - ECONOMIC-GROWTH

KW - DYNAMIC-MODELS

KW - COUNTRIES

KW - EMPIRICS

UR - http://www.scopus.com/inward/record.url?scp=0035606372&partnerID=8YFLogxK

U2 - 10.1016/S0165-1765(00)00387-6

DO - 10.1016/S0165-1765(00)00387-6

M3 - Article

SN - 0165-1765

VL - 70

SP - 327

EP - 333

JO - Economics Letters

JF - Economics Letters

IS - 3

ER -

Cross Sectional and Panel Estimation of Convergence

Abstract

Keywords

UN SDGs

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