Income Convergence across Nations and Regions in East Asia

Abstract

Using the Gross Regional Domestic Product data for 10 East Asian countries, this study shows that East Asia as a whole tends to converge to each other in terms of per capita income. If Northeast Asia is separately considered, there is far stronger evidence in favor of real growth convergence. This result suggests that the prospect for furthering economic and monetary integration in East Asia is not so gloomy. Despite such convergence trend, however, there are still relatively wider income disparities among regions and nations in East Asia than within Europe, suggesting that a common effort to reduce the income gap is needed for deeper integration.