 Divergence. Is it Geography?Thomas Straubhaar, Marc Suhrcke and Dieter Urban No 158, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano Abstract: This paper tests directly a geography and growth model using regional data for Europe, the US, and Japan during different time periods. We set up a standard geography and growth model with a poverty trap and derive a log- linearized growth equation that corresponds directly to a threshold regression technique in econometrics. In particular, we test whether regions with high population density (centers) grow faster and have a permanently higher per capita income than regions with low population density (peripheries). We find geography driven divergence for US states and European regions after 1980. Population density is superior in explaining divergence to initial income which the most important official EU eligibility criterium for regional aid is built on. Divergence is stronger on smaller regional units (NUTS3) than on larger ones (NUTS2). Thus, the wavelength of agglomeration forces seems to be rather small in Europe. Human capital and R&D are transmission channels of divergence processes. Human capital based poverty trap models are an alternative explanation for regional poverty traps. Keywords: Keywords: threshold estimation; economic geography; regional income convergence; poverty trap; regime shifts; bootstrap (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:158 Access Statistics for this paper More papers in Development Working Papers from Centro Studi Luca d'Agliano, University of Milano Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.