Convergence problem of an economic variable represents an underlying forecast of neoclassical economic growth model. This paper aims to analyze the convergence of provincial per capita GDP stability in Vietnam over the period of 1991-2007. | American Journal of Operations Research, 2013, 3, 487-496 Published Online November 2013 () Forecasting the Convergence State of per Capital Income in Vietnam Nguyen Khac Minh1, Pham Van Khanh2 National Economics University, Hanoi, Vietnam 2 Military Technical Academy, Hanoi, Vietnam Email: khacminh@, van_khanh1178@ Received August 17, 2013; revised September 17, 2013; accepted September 26, 2013 Copyright © 2013 Nguyen Khac Minh, Pham Van Khanh. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. 1 ABSTRACT Convergence problem of an economic variable represents an underlying forecast of neoclassical economic growth model. This paper aims to analyze the convergence of provincial per capita GDP stability in Vietnam over the period of 1991-2007. This can be done by two approaches including bias data-based regression method for testing convergence and Markov chain model for describing features of long-term tendency of per capita income in Vietnam growth in provinces. The regression method results in the signs of convergence. To apply Markov process, we divide total pattern into 5 per capita income classes. Result estimated from the Markov chain model shows the poor convergence. Keywords: Convergence; Regression Method; Markov Proces 1. Introduction Suppose that we observe an economic variable η = η ( t , x ) being a stochastic process dependent on parameter t ≥ 0 (time), x ∈ X (space) with considered area X. Observations yik := η ( k , xi ) at time (period) t = k ( k = 0 - T ) are known, and we consider following convergent conception of economic variable y ( t ) := E {η ( t , x )} (t is unlimited over time) as the convergence of function y ( t ) for finite value y ( ∞ ) (called “convergence state”) at sub-regions .
