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Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence

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  • Elias G. Carayannis

    (George Washington University)

  • Rajiv Mallick

    (Pracon University)

Abstract

Traditional regional convergence theory has come under serious scrutiny in view of the recent divergence in regional incomes in the U.S. during the eighties. Neither the neoclassical theory of a steady decline in regional disparities over time nor Kuznets' inverted-U hypothesis can satisfactorily explain regional divergence in an advanced industrial nation. Alternative theories that emphasize spatial restructuring of economic activity have been offered to explain rising regional inequality in the U.S. In this paper, we caution against a hasty approach to new theorizing based on the U.S. experience alone. We study the Canadian experience with regional economic convergence to see how, if at all, it parallels the experience of the United States, Europe, and Australia, with respect to regional growth. By examining provincial data at the industry level, we seek to detect if there are any leading sectors of spatial concentration as in the U.S. We find that, unlike the U.S., European, and Australian experience, Canada has been characterized by consistent, albeit gradual, economic convergence, including in the 1980s. No leading sectors of regional importance emerge, but based on available data, federal programs of regional equalization may be at least partly responsible for continued regional convergence in Canada.

Suggested Citation

  • Elias G. Carayannis & Rajiv Mallick, 1996. "Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 55-74, Summer.
    • Handle: RePEc:rre:publsh:v:27:y:1996:i:1:p:55-74
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    References listed on IDEAS

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    2. Temel, Tugrul, 2011. "Are the U.S. farm wages equalizing? Markov chain approach," MPRA Paper 31930, University Library of Munich, Germany.
    3. Paul Evans, 1998. "Income Dynamics in Regions and Countries," Working Papers 98-09, Ohio State University, Department of Economics.

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