Income Convergence in Southern Africa: A Non-linear Time-Varying Coefficients Approach

Working Paper 858

Abstract

This article investigated income per capita convergence in the Southern African Development Community (SADC) over the period 1980-2017 in a non-linear time-varying coefficients framework. The findings of the study suggested no overall income convergence in the SADC region, but evidence supporting the existence of convergence clubs was found indicat- ing that the SADC comprises five convergence clusters, each converging to its own steady-state equilibrium. These findings suggest that, to pro- mote convergence in the region, policies that explicitly target ’low income’ countries are warranted.