A TIME-SERIES PERSPECTIVE ON CONVERGENCE - AUSTRALIA, UK AND USA SINCE 1870

Tests of the Convergence Hypothesis or the tendency for per capita income levels to narrow over time, have generally utilized cross-sectional data and have usually found conflicting evidence. In this study we utilize time-series data on Australia UK and USA for the period 1870-1992, and time-series tests, to consider both 'catching-up' and 'long-run convergence'. The paper finds evidence in favour of long-run convergence in per capita income levels for the UK and Australia for the period 1892-1992 and catching-up in the case of UK and USA, and Australia and USA, giving some support for the exogenous approaches to economic growth.