Initial conditions and economic growth in the US states

摘要

This paper uses regression trees to examine the role of initial conditions in the economic development of the US states since 1950. We seek to ascertain whether existing differences in state per capita incomes reflect temporary deviations from a common stochastic steady state or the permanent effects of differences in initial conditions. We assume that the states share a common set of economic fundamentals so that, absent differences in initial conditions, they ought to share a common steady state.We allow the members of a large set of potentially important initial conditions to define convergence clubs among the states.