Analyzing the Income Convergence Trend among World Countries by Sigma and Beta Convergence Criteria using Cross Section and Panel Data

Convergence process has been studied in recent years as one of the results of economic growth models. This is to say that poor countries had a higher growth rate compared to richer countries Therefore, the former countries have come closer to the latter from economic point of view. In this research effort has been made to test the theory of income convergence among different countries of the world. In this respect, the sigma and beta convergence factors have been used to analyze cross secontion and panel data of the income among world countries. This has been achived by analyzing the data of income per capita among 120 countries with different levels of income during 1970 -2003 The method used for evaluating speed of convergence is the model of Robert Barrow (1995). The result of sigma and beta convergence factors (absolute conditional) in both cases of panel and cross section data rejects the idea of convergence of average income among world countries. This means the poorer countries become poorer and richer countries become richer all the time.