Test of Income Convergence in D-8 Countries Based on Unit Root Test in Non-linear Framework

In recent decades the issue of income convergence has attracted the attention ofpolicy makers and researchers. Most of these studies seeks to answer the question whether the country's per capita income over time would converge to a common level or not. Income convergence is defined as a decline in a country's income gap to an average per capita income so that more income gap shows less convergence.This study examined the existence of income convergence or divergence in D-8 countries during 1965-2009 using unit root test in non-linear framework. This test with considering the possibility of non-linearity of the income gap has a significant impact on the conclusions and diagnosis of income convergence. The results show that hypothesis of converging per capita real incomes to group's average per capita income in all countries except Pakistan and Nigeria is rejected.