Volume 94, Number 4, May 2011
|Number of page(s)||6|
|Section||Interdisciplinary Physics and Related Areas of Science and Technology|
|Published online||04 May 2011|
Zipf rank approach and cross-country convergence of incomes
Center for Polymer Studies and Department of Physics, Boston University - Boston, MA 02215, USA
2 Institute of Solid State Physics, Bulgarian Academy of Sciences - Sofia, Bulgaria, EU
3 Harvard Medical School and Division of Sleep Medicine, Brigham and Women's Hospital Boston, MA 02115, USA
4 Faculty of Economics, University of Belgrade - 11000 Belgrade, Serbia
5 National Bank of Serbia
6 Faculty of Civil Engineering, University of Rijeka - Rijeka, Croatia
7 Zagreb School of Economics and Management - 10000 Zagreb, Croatia
8 Faculty of Economics, University of Ljubljana - Slovenia, EU
Accepted: 28 March 2011
We employ a concept popular in physics —the Zipf rank approach— in order to estimate the number of years that EU members would need in order to achieve “convergence” of their per capita incomes. Assuming that trends in the past twenty years continue to hold in the future, we find that after t≈30 years both developing and developed EU countries indexed by i will have comparable values of their per capita gross domestic product . Besides the traditional Zipf rank approach we also propose a weighted Zipf rank method. In contrast to the EU block, on the world level the Zipf rank approach shows that, between 1960 and 2009, cross-country income differences increased over time. For a brief period during the 2007–2008 global economic crisis, at world level the of richer countries declined more rapidly than the of poorer countries, in contrast to EU where the of developing EU countries declined faster than the of developed EU countries, indicating that the recession interrupted the convergence between EU members. We propose a simple model of GDP evolution that accounts for the scaling we observe in the data.
PACS: 89.65.Gh – Economics; econophysics, financial markets, business and management / 89.75.Da – Systems obeying scaling laws / 05.40.-a – Fluctuation phenomena, random processes, noise, and Brownian motion
© EPLA, 2011
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.