A new time-varying method for club convergence analysis

One of the most frequently used methods to test the club convergence hypothesis is the Phillips-Sul approach. However, this method does not allow the verification of whether the number, size, or structure of convergence clubs vary over time. Therefore, this study proposes a new time-varying method for identifying convergence clubs by modifying the Phillips-Sul approach. The new method was applied to data on gross domestic product per capita in selected European countries for 1995–2021. The results reveal that the number of convergence clubs, their size, and their internal structure changed over time.