University of Wollongong
Browse

Pair-Wise Output Convergence in East Asia and the Pacific: An Application of Stochastic Unit Root Test

Download (261.37 kB)
preprint
posted on 2024-11-18, 15:57 authored by Muhammad Chowdhury, G Mallik
The objective of this paper is to examine time series cross-country output convergence in eleven counties of East Asia and the Pacific. Specifically, we modelled the crosscountry output differences as a Stochastic Unit Root (STUR) processes a la Granger and Swanson (1997). Since, STUR commonly occur in economic theory as well as in everyday macroeconomic applications, therefore, modelling cross-country output differences as STUR is considered pertinent and superior in terms of performance and forecasting. Leybourne et al. (1997) test has been applied that has a null hypothesis of exact unit roots against an alternative of STUR. The presence of a constant unit root in output differences implies divergence while the presence of a stochastic unit root implies convergence. Using the output-differences between Japan and the 10 other countries, we find output convergence only for the Japan-New Zealand and Japan- Taiwan country-pairs. Alternatively, using the output-differences between Australia (reference country) and the other 10 sampled countries; we fail to find any evidence of convergence.

History

Citation

Chowdhury, K and Mallik, G, Pair-Wise Output Convergence in East Asia and the Pacific: An Application of Stochastic Unit Root Test, Working Paper 07-07, Department of Economics, University of Wollongong, 2007.

Language

English

Usage metrics

    Categories

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC