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Abstract
In this paper we compare the changes in farm incomes in EU regions and US States between1989
and 2002. The aim of this comparative analysis is highlight the patterns of convergence or
divergence and how they differ over time. We use two recent analytical instruments: non-stationary
panel analysis and dynamic distribution analysis. Both tools overcome the problems involved in
using standard cross-section analysis. The results of the non-stationary panel analysis show that the
EU regions are converging, and that family farm income is converging faster than net added value.
In the US states the analysis shows that substantial differences in farm income persist, and there are
no evident signs of convergence. While, the regions are heterogeneous, we modified the analysis to
allow for the concept of conditional convergence. The results show that the regions converge
towards different levels of productivity but regions that are further from their steady-state level will
grow faster.