Dynamic Spatial Modelling of Regional Convergence Processes

Jørgen Lauridsen and Reinhold Kosfeld ()

No 261, HWWA Discussion Papers from Hamburg Institute of International Economics (HWWA)

Abstract: Econometric analysis of convergence processes across countries or regions usually refers to a transition period between an arbitrary chosen starting year and a fictitious steady state. Panel unit root tests and panel cointegration techniques have proved to belong to powerful econometric tools if the conditions are met. When referring to economically defined regions, though, it is rather an exception than the rule that coherent time series are available. For this case we introduce a dynamic spatial modelling approach which is suitable to trace regional adjustment processes in space instead of time. It is shown how the spatial error-correction mechanism (SEC model) can be estimated depending on the spatial stationarity properties of the variables under investigation. The dynamic spatial modelling approach presented in this paper is applied to the issue of conditional income and productivity convergence across labour market regions in unified Germany.

Keywords: Regional convergence; dynamic spatial models; spatial unit roots; spatial error-correction (search for similar items in EconPapers)
JEL-codes: C21 R11 R15 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (23)

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Related works:
Chapter: Dynamic spatial modelling of regional convergence processes (2009)
Journal Article: Dynamic spatial modelling of regional convergence processes (2004)
Working Paper: Dynamic Spatial Modelling of Regional Convergence Processes (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hwwadp:26211

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