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NON-LINEAR REGIONAL INCOME DIVERGENCE AND POLICIES: TURKEY CASE

Hasan Engin Duran ()

Regional Science Inquiry, 2015, vol. VII, issue 2, 107-114

Abstract: The literature on economic convergence is strongly influenced by Neo-Classical Growth model. It describes a monotone saddle path along which each economy converges towards a unique steady state. Commonly employed method in convergence analysis is the linear cross-sectional regressions which links the annual growth rate of regions to their initial income level. Ignoring the non-linearities is important from a policy perspective that implications obtained from a linear regression can be very different to the policies learned from a non-linear case. Aim of the present study is to analyze regional income convergence in Turkey by using nonparametric convergence regressions. We implement our study for 67 provinces and a period 1975-2000. We find that the relationship between initial income and growth takes a inverted-U shape which means that the very low-income and high-income group of provinces experince a slow growth pattern compared to middle-income group. This has several implications for regional economic pol

Keywords: Convergence; nonparametric regressions; Regional Policies (search for similar items in EconPapers)
JEL-codes: R11 R12 (search for similar items in EconPapers)
Date: 2015
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