Abstract:

One of the basic assumptions of Solow growth theory is the convergence hypothesis. The convergence hypothesis states that relatively low-income countries can achieve higher growth in higher-income areas, capturing higher-income income in the long run. There is no common decision on the validity of the convergence hypothesis in empirical studies. In addition, while some of the Fragile Five economies have a Decoherent tendency to converge between 1960-2021, some of them have a divergence tendency. Based on this situation, it is very important to determine whether the convergence hypothesis as a whole is valid in the Fragile Five countries. In this article, it is investigated whether the convergence hypothesis is valid for Fragile Five economies using real income per capita for the period 1960-2021. Structural breakage in the econometric method which does not consider the second-generation panel unit root tests from Smith et al (2004)’s bootstrap unit root tests and structural breakage also into account the IPS created by second-generation panel unit root tests panel of the Fourier LM (Nazlioglu and Karul, 2017) unit root test was applied. The findings obtained as a result of the analyses are that the real incomes per capita of the Fragile Five economies do not converge to the average real income per capita of the Fragile Five countries.

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