Al-Barkaat Journal of Finance & ManagementYear : 2010, Volume : 2, Issue : 1
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ISSN : 0974-7281.
Income Convergence and Income Inequality among Country Groups: A Concordance Analysis
Dr. Ismail Saba
This paper is culled out of my Ph. D. thesis submitted to Department of Economics, Jamia Millia Islamia (A Central University), New Delhi 110025. I am thankful to my Ph.D. supervisor Professor Khan Masood Ahmad for his valuable comments, Email for Correspondence:firstname.lastname@example.org.
This study attempts to test the convergence hypothesis using time series of real per capita income based on the ideas of concordance. It employs the model to test empirically for GDP per capita convergence across 6 country groups. The result suggests the presence of switching while there is more ‘strong divergence’ than ‘strong convergence’. That means the country groups broadly representing rich and poor countries are not converging to each other. Income inequalities among these country groups are increasing. The possible reason of differential growth path may be the different rate of capital accumulation and varying structural change in these economies. These results are inconsistent with the predictions of the Solow-Swan neo-classical model.
Income Convergence, Concordance, Switching, neo-classical growth model.