Working Paper No. 36
By Marco Bianchi
The convergence hypothesis in growth theory implies that the frequency of the density distribution of GDP in a cross-section of countries tends to approach unimodality as we move forward in time. In this paper, we test the convergence theory in a cross-section of 119 countries by means of bootstrap multimodality tests and nonparametric density estimation techniques. By looking at the density distribution of GDP across countries in 1970, 1980 and 1989, we find increasing evidence for bimodality. The finding stands in contrast with the convergence prediction.
Testing for convergence: evidence from nonparametric multimodality tests