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Paradise Lost? Growth, Convergence and Migration in the South Pacific
Author:
Norman Loayza null

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Mr. Paul Cashin
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Series:
IMF Working Papers
Volume/Issue:
Volume 1995: Issue 028
Language:
English
Publication Date:
01 Mar 1995
DOI:
https://doi.org/10.5089/9781451844603.001
ISBN:
9781451844603
ISSN:
1018-5941
Pages:
42
Keywords:
WP; growth rate; per-capita GDP; Island economy; II-matrix estimation procedure; procedure consist; per-capita income; rate of growth; island economies of the South Pacific; time series; Personal income; Migration; National income; Public expenditure review; Disposable income; Australia and New Zealand
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund