Paradise Lost? Growth, Convergence and Migration in the South Pacific
March 1, 1995
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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
Pages:
42
Volume:
1995
DOI:
Issue:
028
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.
