Does Cross-Country Income Convergence Occur?
Income is one of the most popular dimensions for measuring welfare and development; hence, comparing welfare and well-being among countries can be conducted by comparing their per capita income. While income convergence is a certain implication in neoclassical growth theory, it does not always occur...
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| Format: | Article |
| Language: | Indonesian |
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Universitas Muhammadiyah Ponorogo
2025-03-01
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| Series: | Ekuilibrium: Jurnal Ilmiah Bidan Ilmu Ekonomi |
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| Online Access: | https://journal.umpo.ac.id/index.php/ekuilibrium/article/view/9623 |
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| author | Ahmad Thoifur |
| author_facet | Ahmad Thoifur |
| author_sort | Ahmad Thoifur |
| collection | DOAJ |
| description | Income is one of the most popular dimensions for measuring welfare and development; hence, comparing welfare and well-being among countries can be conducted by comparing their per capita income. While income convergence is a certain implication in neoclassical growth theory, it does not always occur empirically. This study aims to investigate whether income convergence occurs among economies. Employing data from 93 countries from 1980 to 2022 obtained from the World Bank, the two-way fixed effect panel model is implemented to verify the existence of β-convergence. The result shows that the initial per capita gross domestic product, representing income, negatively affects income growth, indicating that β-convergence occurs in terms of global and club convergence. This implies that poor countries grew faster than affluent countries. After β-convergence is confirmed, σ-convergence is analyzed by measuring the income dispersion across countries over time. σ-convergence exists if the dispersion declines as time passes. The result shows that σ-convergence exists only among G20, OECD, lower-middle-income, higher-middle-income, and high-income countries. This fact implies that the income gap between poor and rich countries within those groups shrinks over time. In contrast, the income gap among low-income countries did not experience a significant decline during the period. Therefore, international organizations and partnerships must pay more attention to and assist lower-income countries to achieve higher growth rates. |
| format | Article |
| id | doaj-art-e13732a14be848d4b884a485b1df23c5 |
| institution | OA Journals |
| issn | 1858-165X 2528-7672 |
| language | Indonesian |
| publishDate | 2025-03-01 |
| publisher | Universitas Muhammadiyah Ponorogo |
| record_format | Article |
| series | Ekuilibrium: Jurnal Ilmiah Bidan Ilmu Ekonomi |
| spelling | doaj-art-e13732a14be848d4b884a485b1df23c52025-08-20T02:04:37ZindUniversitas Muhammadiyah PonorogoEkuilibrium: Jurnal Ilmiah Bidan Ilmu Ekonomi1858-165X2528-76722025-03-01201627510.24269/ekuilibrium.v20i1.2025.pp62-753023Does Cross-Country Income Convergence Occur?Ahmad Thoifur0Universitas IndonesiaIncome is one of the most popular dimensions for measuring welfare and development; hence, comparing welfare and well-being among countries can be conducted by comparing their per capita income. While income convergence is a certain implication in neoclassical growth theory, it does not always occur empirically. This study aims to investigate whether income convergence occurs among economies. Employing data from 93 countries from 1980 to 2022 obtained from the World Bank, the two-way fixed effect panel model is implemented to verify the existence of β-convergence. The result shows that the initial per capita gross domestic product, representing income, negatively affects income growth, indicating that β-convergence occurs in terms of global and club convergence. This implies that poor countries grew faster than affluent countries. After β-convergence is confirmed, σ-convergence is analyzed by measuring the income dispersion across countries over time. σ-convergence exists if the dispersion declines as time passes. The result shows that σ-convergence exists only among G20, OECD, lower-middle-income, higher-middle-income, and high-income countries. This fact implies that the income gap between poor and rich countries within those groups shrinks over time. In contrast, the income gap among low-income countries did not experience a significant decline during the period. Therefore, international organizations and partnerships must pay more attention to and assist lower-income countries to achieve higher growth rates.https://journal.umpo.ac.id/index.php/ekuilibrium/article/view/9623income growthβ-convergenceσ-convergenceglobal convergenceclub convergence |
| spellingShingle | Ahmad Thoifur Does Cross-Country Income Convergence Occur? Ekuilibrium: Jurnal Ilmiah Bidan Ilmu Ekonomi income growth β-convergence σ-convergence global convergence club convergence |
| title | Does Cross-Country Income Convergence Occur? |
| title_full | Does Cross-Country Income Convergence Occur? |
| title_fullStr | Does Cross-Country Income Convergence Occur? |
| title_full_unstemmed | Does Cross-Country Income Convergence Occur? |
| title_short | Does Cross-Country Income Convergence Occur? |
| title_sort | does cross country income convergence occur |
| topic | income growth β-convergence σ-convergence global convergence club convergence |
| url | https://journal.umpo.ac.id/index.php/ekuilibrium/article/view/9623 |
| work_keys_str_mv | AT ahmadthoifur doescrosscountryincomeconvergenceoccur |