Journal Article

An Empirical Investigation on the Gravitation and Convergence of Industry return Rates in OECD Countries

International Review of Applied Economics, 25(4): 465-502

Tests are offered for the hypotheses that sectoral average profit rates and incremental return rates are gravitating around or converging towards a common value. We study data for various OECD countries relying on an econometric method able to account for residual autocorrelation and cross-sector correlation. Our null hypotheses receive only a mixed empirical support. This is interpreted as the result of various kinds of limitations to capital mobility. Policy implications are discussed.

Author

Andrea Vaona