Research On The Convergence In Northwest Of China

The question about whether convergence exists is often discussed by economists recently. The reason is not only that reduction of economic gap among districts is strongly demanded, but also that there are theoretically discussion about convergence. Neoclassical growth theory which is represented by Keynes holds the view that a country's per capital growth rate will be equal to zero finally. But endogenous growth theory has explained that convergence doesn't exist for there are endogenous elements promoting growth. Regional equality, especially between eastern regions and western regions in China, has become obvious since 1978. Many empirical research results have illuminated that absolute convergence doesn't exist in our country, but "convergence club" and conditional convergence is true.Models of cross data and models of time series is often used for they include different information. Models of panel data which are well taken into practice combine the advantage from the previous two models. In this paper, three kinds of models have been introduced. And model of time series is suitable for analysis of convergence about northwest of China.Northwest of China which was the economical and political centre of China in the history is an economic region formed long time ago. For the policy bias from the government, the regional equality between northwest of China and eastern China reduced from the foundation of New China to 1978. But the status that northwest of China is the developing district has not changed. At the same time, regional equality in the inner district can not be neglected. Recently Sinkiang has developed fast and by contrast, the speed of development in Gansu province is slow. Before 1978, convergence in northwest of China is true, but is fault after 1978.Economic forecasting is predicting growth trend depending on information from history. In the last part of the paper, Transfer Function modeling including TFP is utilized to forecasting. The result shows that convergence will be restricted in the 8 years.