Convergence Across the United States

Evidence from Panel ESTAR Unit Root Test

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Many empirical studies try to test whether there is income convergence across metropolitan areas in the continental United States. Drennan et al. (Journal of Economic Geography 4(5), 2004) claim that income among metropolitan economies is diverging for the period 1969–2001, after applying univariate unit root tests to the time series data. This paper brings new information to this area of study by using the nonlinear panel unit root test of the Exponential Smooth Auto-Regressive Augmented Dickey–Fuller (ESTAR-ADF) unit root test on the time series data for the period 1929–2005. Our results find evidence of stationarity for time series and thereby support beta and sigma convergence among states in a nonlinear setup. However, when the non-linear test encompasses cross section dependence as advocated by Cerrato et al. (2008), the evidence is attenuated.
Original languageEnglish
Pages (from-to)52-64
Number of pages13
JournalInternational Advances in Economic Research
Volume16
Issue number1
Early online date23 Oct 2009
Publication statusPublished - Feb 2010
Externally publishedYes

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Unit root tests
Time series data
σ-convergence
Stationarity
Empirical study
β-convergence
Metropolitan areas
Cross-section dependence
Income
Economic geography
Income convergence
Panel unit root tests

Cite this

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abstract = "Many empirical studies try to test whether there is income convergence across metropolitan areas in the continental United States. Drennan et al. (Journal of Economic Geography 4(5), 2004) claim that income among metropolitan economies is diverging for the period 1969–2001, after applying univariate unit root tests to the time series data. This paper brings new information to this area of study by using the nonlinear panel unit root test of the Exponential Smooth Auto-Regressive Augmented Dickey–Fuller (ESTAR-ADF) unit root test on the time series data for the period 1929–2005. Our results find evidence of stationarity for time series and thereby support beta and sigma convergence among states in a nonlinear setup. However, when the non-linear test encompasses cross section dependence as advocated by Cerrato et al. (2008), the evidence is attenuated.",
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Convergence Across the United States : Evidence from Panel ESTAR Unit Root Test. / Lau, Chi Keung.

In: International Advances in Economic Research, Vol. 16, No. 1, 02.2010, p. 52-64.

Research output: Contribution to journalArticle

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