ABSTRACT
This chapter discusses the notion of the convergence or divergence and reviews how to test convergence. The convergence has been a prominent element in social science. Even though the notions of divergence and convergence are well understood by social scientists, it was not easy to define statistically. Researchers have used three different concepts of the convergence, depending on how to test the convergence: β-convergence, relative convergence, and σ-convergence. The β-convergence was born from the Solow growth model, where all countries share the same but exogenous technology. Phillips and Donggyu Sul propose the notion of the relative convergence to examine whether the actual data supports the Solow growth model. If the technology progress is homogeneous, then the growth rate of the log per capita real income must converge the steady-state level. In the long run, the slope coefficients on the time trend must be identical.
