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Title:Markov or not Markov - this should be a question PDF Logo
Authors:Bickenbach, Frank
Bode, Eckhardt
Issue Date:2001
Series/Report no.:Kieler Arbeitspapiere 1086
Abstract:Although it is well known that Markov process theory, frequently applied in the literature on income convergence, imposes some very restrictive assumptions upon the data generating process, these assumptions have generally been taken for granted so far. The present paper proposes, resp. recalls chi-square tests of the Markov property, of spatial independence, and of homogeneity across time and space to assess the reliability of estimated Markov transition matrices. As an illustration we show that the evolution of the income distribution across the 48 coterminous U.S. states from 1929 to 2000 clearly has not followed a Markov process.
Subjects:Convergence
Markov process
chi-square tests
U.S. regional growth
JEL:O40
R11
C12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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