@article {2603,
	title = {The impact of trade liberalization and the fiscal equalization transfer policy on provincial income disparities in Canada: an application of GMM estimation},
	journal = {Applied Economics},
	volume = {43},
	year = {2011},
	pages = {1679-1689},
	abstract = {This article uses the Solow growth model and the panel data method toexamine the effect of trade liberalization and the federal equalizationtransfers on income convergence among Canadian provinces between 1981\&nbsp;and 2006. Estimation problems of weak instruments and endogenous\&nbsp;regressors are addressed by the use of a system Generalized Method of\&nbsp;Moment (GMM) estimator. The results from the empirical analysis\&nbsp;indicate that the current rate of convergence of Personal Income (PI) in\&nbsp;Canada is 4.41\% per year. This rate is considerably higher than the range\&nbsp;of 1.80 and 2.41\% per year that previous studies using least-square\&nbsp;estimators have reported. The findings from the policy analysis show that\&nbsp;the launching and expansion of the North America regional integration\&nbsp;have de-accelerated the convergence speed for Canadian provinces by 3.99\&nbsp;and 3.15\% per year, respectively. However, consistent with the results\&nbsp;from previous studies, the fiscal transfers, which are part of the federal\&nbsp;equalization programme, have accelerated the convergence speed for\&nbsp;Canadian provinces.},
	author = {Alexander Bilson Darku}
}
