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Regional Cohesion: Evidence and Theories of Regional Growth and Convergence

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  • Sala-i-Martin, Xavier

Abstract

After arguing that the concepts of b-convergence and s-convergence are independently interesting, this paper extends the empirical evidence on regional growth and convergence across the United States, Japan, and five European nations. We confirm that the estimated speeds of convergence are surprisingly similar across data sets: regions tend to converge at a speed of approximately 2% per year. We also show that the inter-regional distribution of income in all countries has shrunk over time. We then argue that, among the proposed potential explanations of this phenomenon, the one-sector neoclassical growth model and the hypothesis of technological diffusion seem to be the only ones which survive scrutiny.

Suggested Citation

  • Sala-i-Martin, Xavier, 1994. "Regional Cohesion: Evidence and Theories of Regional Growth and Convergence," CEPR Discussion Papers 1075, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1075
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    More about this item

    Keywords

    Capital Mobility; Convergence; Endogenous Growth; Neoclassical Growth; Regional Cohesion; Regional Economic Growth;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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