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A contribution to the empirics of convergence in real GDP growth: The role of financial crises and exchange-rate regimes

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Morales-Zumaquero, Amalia and Sosvilla-Rivero, Simón (2014) A contribution to the empirics of convergence in real GDP growth: The role of financial crises and exchange-rate regimes. [ Working Papers on International Economics and Finance; nº 14-06, ISSN: 1696-6376 ]

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Abstract

This paper investigates the convergence in real Gross Domestic Product (GDP) growth focusing on the impact of financial crises (i.e. banking crises, currency crises and debt crises) and nominal exchange rate regimes (i.e. fixed, intermediate and flexible) on convergence. To that end, we compute four convergence indicators (s-convergence, g- convergence, absolute b-convergence and conditional b-convergence), for 163 countries classified into four income groups during the 1970-2011 period. Results suggest that: (i) There is evidence in favor of β-convergence and β-convergence only for high income countries; (ii) absolute and conditional β-convergence are presented in each of the four income groups of countries under study; (iii) exchange-rate regimes seem to play some role in upper-middle and lower-middle income countries; and (iv) financial crises have a negative and significant impact on GDP growth independently of the level of income of countries.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Convergence indicators; Financial crises; Nominal exchange-rate regimes
Subjects:Social sciences > Economics > Depressions
Social sciences > Economics > Economic development
Social sciences > Economics > Econometrics
Social sciences > Economics > World economy
JEL:O47, G15, F33
Series Name:Working Papers on International Economics and Finance
Volume:
Number:14-06
ID Code:30642
Deposited On:29 Jun 2015 11:55
Last Modified:19 Dec 2018 09:59

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