Structural Reforms and Regional Convergence

Antonio Spilimbergo and Natasha Che

No 2012/106, IMF Working Papers from International Monetary Fund

Abstract: Which structural reforms affect the speed the regional convergence within a country? We found that domestic financial development, trade/current account openness, better institutional infrastructure, and selected labor market reforms facilitate regional convergence. However, these reforms have mixed effects on the growth of regions closer to the country’s development frontier. We also document that regional income disparity and average income are inversely correlated across countries so that speeding up regional convergence increases national income. We also present a theoretical model to discuss these results.

Keywords: WP; Structural reforms; regional convergence; economic growth; income inequality; frontier region; cross-region mobility; region j; growth rate; development frontier; EU sample; Euro area debt crisis; development level; GDP variable; part of the country; country frontier; capital intensity level; Labor taxes; Minimum wages; Productivity; Tax wedge; Global (search for similar items in EconPapers)
Pages: 34
Date: 2012-04-01
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Citations: View citations in EconPapers (19)

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Working Paper: Structural Reforms and Regional Convergence (2012)
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