Abstract

RODRIGUEZ BENAVIDES, Domingo; MENDOZA GONZALEZ, Miguel Ángel  and  CLIMENT HERNANDEZ, José Antonio. The Convergence Hypothesis in Mexico: A Weak σ-Convergence Approach. Rev. mex. econ. finanz [online]. 2022, vol.17, n.2, e606.  Epub Oct 28, 2022. ISSN 2448-6795.  https://doi.org/10.21919/remef.v17i2.606.

We analyze the convergence hypothesis in Mexico with the relatively novel test of -weak convergence, proposed by Kong, Phillips and Sul (2019), in the period 1940-2019 and in two sub-periods with the totality of the federal entities and with groups formed from their income levels, in order to determine whether the process of trade liberalization and the entry into force of the North American Free Trade Agreement (NAFTA) promoted regional convergence. It is found that for both the first period and the whole period there is evidence of weak convergence, on the contrary, evidence of divergence is revealed for the second period. The application of this test to groups formed on the basis of their income levels helps to identify whether some of these groups may be responsible for the lack of convergence of all the states. However, a limitation of this test is that it may not reconcile results obtained for the whole period with those of the sub-periods.

Keywords : C33; C80; D63; R11; σ-convergence; GDP per capita; Regional Inequality; Mexico.