The Convergence Hypothesis is a concept in economic growth theory that is usually associated with Neoclassical growth models. This hypothesis suggests that low-income countries or regions may converge economically to high-income countries or regions over time, i.e. there will be a convergence in per capita income or output levels. If countries have the same economic structure, production technology and savings rates, low-income countries will grow more and approach high-income countries, which is referred to as unconditional convergence. The convergence that occurs when countries have similar structural characteristics in terms of education level, technological development and policy preferences can be defined as conditional convergence. In addition, the homogenization of countries' income levels over time is referred to as sigma convergence. The aim of this study is to investigate the Convergence Hypothesis for E7 countries by analyzing the GDP per capita data for the period 1990-2023 using the Fourier panel structural break unit root test. The findings indicate that the Convergence Hypothesis is valid for E7 countries.
Convergence Hypothesis, E7 Countries, Panel Unit Root Test