IMF Working Papers

Regional Convergence in Latin America

By Bennett W Sutton, Genevieve M Lindow, Maria Isabel Serra, Gustavo Ramirez, Maria Fernanda Pazmino

May 1, 2006

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Bennett W Sutton, Genevieve M Lindow, Maria Isabel Serra, Gustavo Ramirez, and Maria Fernanda Pazmino. Regional Convergence in Latin America, (USA: International Monetary Fund, 2006) accessed November 12, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents empirical evidence on convergence of per capita output for regions within six large middle-income Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. It explores the role played by several exogenous sectoral shocks and differences in steady states within each country. It finds that poor and rich regions within each country converged at very low rates over the past three decades. It also finds evidence of regional "convergence clubs" within Brazil and Peru- the estimated speeds of convergence for these countries more than double after controlling for different subnational levels of steady state. For the latter countries and Chile, convergence is also higher after controlling for sector-specific shocks. Finally, results show that national disparities in per capita output increased temporarily after each country pursued trade liberalization.

Subject: Agricultural sector, Manufacturing, Mining sector, Public expenditure review, Trade liberalization

Keywords: Country, GDP, WP

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2006/125

  • Stock No:

    WPIEA2006125

  • ISBN:

    9781451863857

  • ISSN:

    1018-5941

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