Regional Convergence in Latin America

29 Pages Posted: 21 Jun 2006

See all articles by Maria Isabel Fernandes Serra

Maria Isabel Fernandes Serra

Columbia University - Graduate School of Business; International Monetary Fund (IMF)

Maria Fernanda Pazmino

Central Bank of Ecuador

Genevieve Lindow

International Monetary Fund (IMF)

Bennett Sutton

International Monetary Fund (IMF)

Gustavo Ramirez

International Monetary Fund (IMF)

Date Written: May 2006

Abstract

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.

Keywords: growth, convergence, regional disparities, Argentina, Brazil, Chile, Colombia, Mexico, Peru

JEL Classification: C21, O47, O56, R11

Suggested Citation

Serra, Maria Isabel Fernandes and Pazmino, Maria Fernanda and Lindow, Genevieve and Sutton, Bennett and Ramirez, Gustavo, Regional Convergence in Latin America (May 2006). IMF Working Paper, Vol. , pp. 1-29, 2006. Available at SSRN: https://ssrn.com/abstract=910690

Maria Isabel Fernandes Serra (Contact Author)

Columbia University - Graduate School of Business ( email )

3022 Broadway
New York, NY 10027
United States

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Maria Fernanda Pazmino

Central Bank of Ecuador ( email )

Quito
Ecuador

Genevieve Lindow

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Bennett Sutton

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Gustavo Ramirez

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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