Trade and convergence of per capita income in the Indian Ocean Zone, 1950–2008

Abstract

This empirical study of per capita income convergence across the countries of the Indian Ocean Zone (IOZ) during 1950-2008 relies on a distribution dynamics approach that employs both stochastic kernels (stacked and high-density region plots) and a nonparametric estimator. During this period, no absolute convergence process of incomes occurs in the IOZ. Nevertheless, a bipolar situation emerges, such that countries with the weakest relative incomes in relation to the IOZ average remain in the same relative position-that is, the poorest countries remain poor. The relatively richest countries (i.e., Australia, Malaysia, Mauritius, Singapore, and Thailand) constitute a convergence club. Use of conditioned distributions shows that the dynamics of per capita gross domestic product (GDP) distributions can be explained both by the openness rate measured as trade/GDP ratio, or a proxy for trade policy, and by manufactured goods exports. However, this result likely confirms that the openness was accompanied by an increase in manufactured goods trade for many of these countries. In addition, openness defined following Sachs and Warner has a less explanatory power than traditional measure. Finally, bilateral trade and trade agreements have limited effects.

Privatization and Growth: Natural Experiments of European Economies in Transition

“…Then, Country J's income ratio to the US is, (yJ/yUS) = (AJ/AUS) (klJ/klUS) α (hcJ/hcUS) 1 -α (4) (4) tells us Country J's income ratio depends on ratios of the two TFPs, the two capitallabor ratios and the two average human capital. As noted above, Peron and Rey (2012), Cuberes and Jerzmanowski (2009), Jones and Olken (2008), and Fuchs-Schundeln (2008), use income relative to the US as the dependent variable. But do not take explanatory variables as relative to the corresponding US/a bench mark country's numbers in their econometric investigation.…”

Polarization of life expectancy across countries: Does biological and cultural distance to the health technological frontier matter?

“… Quah (), Bandyopadhyay (), and Peron and Rey () use conditioned stochastic kernel to investigate whether countries/states that cluster into a convergence club in income are trading partners or neighbors. …”

“…Quah (1997),Bandyopadhyay (2012), andPeron and Rey (2012) use conditioned stochastic kernel to investigate whether countries/states that cluster into a convergence club in income are trading partners or neighbors.2 Bloom and Canning (2001) find that on average technological advances in health take 60 years to diffuse from developed to developing countries.…”

Food Inflation in the European Union: Distribution Analysis and Spatial Effects

“…Throughout the literature, several procedures have been proposed for the estimation of the optimal bandwidth. In this study, we choose the strategy proposed by Bashtannyk and Hyndman () as it has several advantages and has also been widely used in distribution dynamics analysis (e.g., Arbia, Basile, and Piras ; Fischer and Stumpner ; Maza, Hierro, and Villaverde ; Peron and Rey ).…”