Capital Deepening and Regional Inequality: An Empirical Analysis (refereed paper)

Daniel Felsenstein ()

ERSA conference papers from European Regional Science Association

Abstract: We present a simple reproducible methodology for constructing regional capital stock data, which we apply to Israel. We find that capital deepening has been sigma-convergent since 1985. This process is "inverted" since capital stocks and capital-labor ratios in the richer center have been catching-up with their counterparts in the poorer periphery. We explain this phenomenon in terms of fundamental changes in regional policy. Despite this, regional wages have not been sigma-convergent because other wage determinants have been sigma-divergent

Date: 2011-09
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa10p759

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