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Dynamic Spatial Modelling of Regional Convergence Processes

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  • Kosfeld, Reinhold
  • Lauridsen, Jorgen

Abstract

Econometric analysis of convergence processes across countries or regions usually refers to a transition period between an arbitrary chosen starting year and a fictitious steady state. Panel unit root tests and panel cointegration techniques have proved to belong to powerful econometric tools if the conditions are met. When referring to economically defined regions, though, it is rather an exception than the rule that coherent time series are available. For this case we introduce a dynamic spatial modelling approach which is suitable to trace regional adjustment processes in space instead of time. It is shown how the spatial error-correction mechanism (SEC model) can be estimated depending on the spatial stationarity properties of the variables under investigation. The dynamic spatial modelling approach presented in this paper is applied to the issue of conditional income and productivity convergence across labour market regions in unified Germany.

Suggested Citation

  • Kosfeld, Reinhold & Lauridsen, Jorgen, 2004. "Dynamic Spatial Modelling of Regional Convergence Processes," Discussion Paper Series 26211, Hamburg Institute of International Economics.
    • Handle: RePEc:ags:hwwadp:26211
    DOI: 10.22004/ag.econ.26211
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    References listed on IDEAS

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    More about this item

    Keywords

    Community/Rural/Urban Development;

    JEL classification:

    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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