Income convergence in the MENA region : an empirical analysis -

Abstract

Per capita convergence of income is an important field of development economics that has been widely examined and attracted a wide array of scholars. The convergence debate has stemmed from the Solow model prediction of equalizing long run growth levels of GDP-capita. This thesis’s main aim is to increase the amount of literature that examines the theory of income convergence. The test applied for confirming the presence of convergence for both absolute and conditional convergence is done using panel data fixed effects approach aimed at testing the hypothesis. The thesis is divided into the following sections: chapter one is an introduction into the topic of convergence as well as a brief overview of the main aspects of the MENA region; chapter two is a literature review of the theoretical and empirical literature of the convergence hypothesis; chapter three provides an overview of the MENA region economic outlook; chapter four tests an empirical model using dynamic panel data fixed effects model; chapter five concludes with a brief re assessment of the model and future examination.