ARE US REGIONAL INCOMES CONVERGING - SOME FURTHER EVIDENCE

Regions of the United States represent a set of economies where the co nditions often argued as underlying convergence in per-capita income a re satisfied, Stochastic convergence among regions implies the rejecti ons of a unit root in relative per-capita income, a hypothesis which i s not supported by conventional tests. Carlino and Mills (1993) allow for an exogenous trend break, but can only reject the unit root hypoth esis in three of the eight U.S. regions. We incorporate endogenously d etermined break points and significantly strengthen their results, bei ng able to reject the unit root hypothesis in seven regions.