Paradise Lost? Growth, Convergence and Migration in the South Pacific

Author/Editor:

Norman Loayza ; Paul Cashin

Publication Date:

March 1, 1995

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 examines the determinants of growth for nine South Pacific countries during the period 1971-93, using the analytical framework of the Solow-Swan neoclassical growth model. Chamberlain’s II-matrix estimator is used to account for unobserved country-specific heterogeneity in the growth process, and to control for errors-in-variables bias in calculations of real per-capita GDP. The speed of convergence of South Pacific countries to their respective steady-state levels of per-capita GDP, after controlling for the important regional effects of net international migration, is estimated at a relatively fast 4 percent per year. In addition, private and official transfers emanating from regional donor countries have kept the dispersion of real per-capita national disposable income constant over the period, despite a significant widening in the regional dispersion of real per-capita GDP.

Series:

Working Paper No. 95/28

Subject:

Notes:

Also published in Staff Papers, Vol. 42, No. 3, September 1995.

English

Publication Date:

March 1, 1995

ISBN/ISSN:

9781451844603/1018-5941

Stock No:

WPIEA0281995

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

42

Please address any questions about this title to publications@imf.org