The Convergence Debate : Some Empirical Issues

Several empirical considerations have emerged over the last decade, which are central to the debate on convergence of international income levels. For instance, there has been discussion over the use of total factor productivity, as opposed to income per capita or labour productivity, as the basis for convergence studies. Further, there is the question of sample selection: that is, what set of countries should be used. Many other considerations, such as the use of trended data, the robustness of results over time, the use of purchasing power parity estimates, and errors in estimation, are also at issue. This essay will examine these issues, and discuss them in the context of several well known empirical studies.