Competing models of global dynamics: evidence from panel models with spatially correlated error components

Bernard Fingleton

Research output: Contribution to journalArticle

17 Citations (Scopus)

Abstract

This paper considers two competing theories with differing implications for the long run dynamics of the global economy, neoclassical theory, implying conditional convergence, and New Economic Geography, implying multiple equilibria. These rival non-nested hypotheses are combined within an artificial nesting, panel data, model, embodying a spatial autoregressive error process allowing for unmodelled inter-country heterogeneity and spatially dependent errors, and tested using a panel of 77 countries over the years 1970, 1980, 1990 and 2000. The New Economic Geography theory is shown to have superior explanatory power, but it also introduces some significant problems of estimation and measurement.
LanguageEnglish
Pages542-558
Number of pages16
JournalEconomic Modelling
Volume25
Issue number3
DOIs
Publication statusPublished - 2008

Fingerprint

Panel model
Error components
Global dynamics
New economic geography
Multiple equilibria
Conditional convergence
Global economy
Neoclassical theory
Non-nested hypotheses

Keywords

  • economic geography
  • global economics
  • panel data
  • spatially correlated error components
  • spatial econometrics

Cite this

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Competing models of global dynamics: evidence from panel models with spatially correlated error components. / Fingleton, Bernard.

In: Economic Modelling, Vol. 25, No. 3, 2008, p. 542-558.

Research output: Contribution to journalArticle

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