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

March 1, 1995

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Norman Loayza, and Paul Cashin. Paradise Lost? Growth, Convergence and Migration in the South Pacific, (USA: International Monetary Fund, 1995) accessed September 18, 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 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.

Subject: Disposable income, Expenditure, Migration, National accounts, National income, Personal income, Population and demographics, Public expenditure review

Keywords: Australia and New Zealand, Disposable income, Growth rate, II-matrix estimation procedure, Island economies of the South Pacific, Island economy, Migration, National income, Per-capita GDP, Per-capita income, Personal income, Procedure consist, Public expenditure review, Rate of growth, Time series, WP

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1995/028
Stock No:

WPIEA0281995
ISBN:

9781451844603
ISSN:

1018-5941

Notes

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

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