This paper revisits the income convergence hypothesis by using the nonlinear unit root test of Kapetanios et al. [Kapetanios, G., Shin, Y. and A. Snell, 2003. Testing for a unit root in the nonlinear STAR framework. Journal of Econometrics 112, 359-379.]. Out of the 12 OECD income gaps in which...

The currency equivalent index measures the discounted economic capital stock of money producing the monetary service flow, but does so under assumptions that cause downward bias. We propose an extension that will correct for a significant amount of this bias.