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Drifting Together or Falling Apart? The Empirics of Regional Economic Growth in Post-Unification Germany

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  • Roberta Colavecchio
  • Declan Curran
  • Michael Funke

Abstract

The objective of this paper is to address the question of convergence across German districts in the first decade after German unification by drawing out and emphasising some stylised facts of regional per capita income dynamics. We achieve this by employing non-parametric techniques which focus on the evolution of the entire cross-sectional income distribution. In particular, we follow a distributional approach to convergence based on kernel density estimation and implement a number of tests to establish the statistical significance of our findings. This paper finds that the relative income distribution appears to be stratifying into a trimodal/bimodal distribution.

Suggested Citation

  • Roberta Colavecchio & Declan Curran & Michael Funke, 2005. "Drifting Together or Falling Apart? The Empirics of Regional Economic Growth in Post-Unification Germany," CESifo Working Paper Series 1533, CESifo.
    • Handle: RePEc:ces:ceswps:_1533
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    Cited by:

    1. Joachim Frick & Jan Goebel, 2008. "Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach," Regional Studies, Taylor & Francis Journals, vol. 42(4), pages 555-577.
    2. Falko Juessen, 2009. "A distribution dynamics approach to regional GDP convergence in unified Germany," Empirical Economics, Springer, vol. 37(3), pages 627-652, December.
    3. Bruckmeier, Kerstin & Schwengler, Barbara, 2009. "The impact of federal social policies on spatial income inequalities in Germany : empirical evidence from social security data," IAB-Discussion Paper 200901, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Sebastian Vollmer & Hajo Holzmann & Florian Ketterer & Stephan Klasen, 2013. "Distribution dynamics of regional GDP per employee in unified Germany," Empirical Economics, Springer, vol. 44(2), pages 491-509, April.
    5. Kai Konrad & Stergios Skaperdas, 2012. "The market for protection and the origin of the state," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(2), pages 417-443, June.
    6. Aparna Lolayekar & Pranab Mukhopadhyay, 2017. "Growth Convergence and Regional Inequality in India (1981–2012)," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(2), pages 307-328, June.
    7. Xiaoguang Liu & Jian Yu & Tsun Se Cheong & Michal Wojewodzki, 2022. "The Future Evolution of Housing Price-to-Income Ratio in 171 Chinese Cities," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 159-196, May.
    8. Beate Schirwitz & Christian Seiler & Klaus Wohlrabe, 2009. "Regionale Konjunkturzyklen in Deutschland – Teil III: Konvergenz," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 62(15), pages 23-32, August.
    9. Korzhenevych, Artem & Langer, Sebastian, 2016. "The Flypaper Effect in Germany: An East-West Comparison," CEPIE Working Papers 10/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    10. Götz Marta, 2010. "Poland in the Period of Economic Transition and Germany After Reunification an Attempt at Assessing Σ-Convergence," European Spatial Research and Policy, Sciendo, vol. 17(2), pages 71-94, October.
    11. Kurt Geppert & Martin Gornig & Axel Werwatz, 2008. "Economic Growth of Agglomerations and Geographic Concentration of Industries: Evidence for West Germany," Regional Studies, Taylor & Francis Journals, vol. 42(3), pages 413-421, April.

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    More about this item

    Keywords

    regional economic growth; Germany; convergence clubs; density estimation; modality tests;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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