Quah, Danny (1993) Galton's fallacy and tests of the convergence hypothesis. Econometrics; EM/1993/265 (EM/1993/265). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.
Full text not available from this repository.Abstract
Recent tests for the convergence hypothesis derive from regressing average growth rates on initial levels: a negative initial coefficient is interpreted as convergence. These tests turn out to be plagued by Galton's classical fallacy of regression towards the mean. Using a dynamic version of Galton's fallacy, I establish that coefficients of arbitrary signs in such regressions are consistent with an unchanging cross-section distribution of incomes. Alternative, more direct empirics used here show a tendency for divergence, rather than convergence, of cross-country incomes.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://sticerd.lse.ac.uk |
| Additional Information: | © 1993 the author |
| Divisions: | Centre for Economic Performance Economics |
| Subjects: | H Social Sciences > HB Economic Theory |
| Date Deposited: | 27 Apr 2007 |
| Last Modified: | 13 Sep 2024 19:34 |
| URI: | http://eprints.lse.ac.uk/id/eprint/2186 |
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