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CONVERGENCE HYPOTHESIS: AN APPLICATION ON SELECTED OECD COUNTRIES
Abstract
Convergence in other words, with the closing of the gap between rich and poor economies, the large number of possible outcomes that may arise in the economy represents only one. While the countries in the middle income group are close to the rich, the poor countries are left behind. On the other hand, countries may experience a divergence in which rich countries are richer and poor countries are poorer than convergence as a whole. All of these possibilities are related to the change in per capita income distribution around the world. In this study, it was tried to be tested by panel unit root test methods that the growth of income levels of selected OECD countries (Argentina, Australia, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Turkey, UK and USA) from 1961-2015 converged to each other. Findings from the study show that OECD countries converge on the convergence of national income to the US average national income in the mentioned period. Tests produced are consistent with each other in that the H0 panel unit root process can’t be accepted.
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