Structural Reforms and Regional Convergence

Natasha Xingyuan Che () and Antonio Spilimbergo

No 8951, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: economic growth; income inequality; regional convergence; structural reforms (search for similar items in EconPapers)
JEL-codes: J68 O11 O18 O25 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-ure
Date: 2012-04
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