Search

This paper investigates the relationship between economic growth and regional income inequality in a spatial econometric perspective. The role of space in the measure of inequality is discussed, and a new theoretical model that relates inequality with economic growth is introduced. The proposed model extends a spatial Mankiw–Romer–Weil specification by introducing regional income inequality as a determinant of economic growth. The measure of inequality proposed as a covariate in the model is derived by a spatial decomposition of the Gini index. An empirical analysis focused on European Union NUTS-2 regions is carried out to illustrate the model. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to discuss the role of Markovian transitions related to the economic convergence among countries. Thus, the paper aims to develop an overview of several classical approaches, including an analysis of fallacies exposed through the literature. Design/methodology/approach - The number of modes in the distribution of the RGDPL for 100 countries in the period from 1986 to 2000 is calculated. Next, the results obtained from the relevant transition matrices are discussed and the existence of twin peaks in the distribution of income is analyzed. Finally, the adequacy of both Markovian and (time) homogeneity hypotheses in connection with the stochastic process that underlies income distribution is studied. Findings - The results across the period 1986-2000 show the evolution of countries into convergence clubs, instead of the existence of economic convergence. Originality/value - The paper discusses two important issues on the convergence hypothesis. First, the discretization process really matters. If quartiles or quintiles are used the ergodic distribution does not show twin peaks because the process shows an equiprobabilistic ergodic (stationary) distribution in the long term. Second, the twin peaks results need a Markov (time) homogeneous chain as a model for the underlying income process, and then Chapman-Kolmogorov's equation must be satisfied. However, the paper finds empirical evidences of failure in such an argument. [ABSTRACT FROM AUTHOR]

In this paper we consider the usefulness of alternative measures of convergence in an equality of opportunity framework. In particular we use established results from the public finance and mobility literature to show that a form of β-convergence is both a necessary and sufficient condition for a reduction in inequality of opportunity for a wide range of popular inequality measures. We illustrate our approach using regional data from the United States, Japan, and Europe. [ABSTRACT FROM AUTHOR]

This paper investigates the empirical validity of different classes of 'development trap' models of economic growth. Quah (1993) finds that the cross country distribution of per capita income is moving toward a twin peaked distribution. This finding has supported and encouraged a large theoretical literature on development traps that produce twin peaks through physical and human capital accumulation. Contrary to these models, physical and human capital are found to be moving toward single peaked distributions. The productivity residual is moving toward a twin peaked distribution that mirrors that of per capita income. Quah's result appears to be driven by productivity differences rather than factor accumulation. The importance of productivity is consistent with cross sectional results by Klenow & Rodriguez-Clare (1997) and Hall & Jones (1999). Kremer, Onatski & Stock (2001) and Jones (1997) have questioned the robustness of the lower peak in output This paper shows that the productivity residual has a more prominent and more robust lower peak than output. A further examination suggests that dynamic interaction between human capital accumulation and productivity may act in the long run to eliminate the low peak in productivity. [ABSTRACT FROM AUTHOR]

Copyright of Papers in Regional Science is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper reviews catch-up growth in various parts of the world, especially in the twentieth century, with a particular focus on what this implies for the Global South. In 1950, US per capita national income, adjusted for purchasing power, was nearly five times the world average. Since then, Western Europe and Japan have closed their per capita income gaps with the USA. East Asia, South Asia and some other developing countries have also started to close their gaps with the West in recent decades. Thus, after well over a century of growing international economic disparities or divergence, the world has witnessed an era of uneven catching up with the North in parts of the South since the mid-twentieth century. [ABSTRACT FROM AUTHOR]

The objective of this paper is twofold: first, to show an application of the distribution dynamics approach developed in the literature on economic growth and income inequality to spatial price analysis, and second, to study the behaviour of Russian regional prices for staples during the decade of 2001-2010. The study includes three veins: first, tracing the evolution of price dispersion and changes in the shape of the cross-region price distribution over time; second, analysing changes in price ranking of regions (rank mobility); and third, analysing quantity mobility with the use of stochastic kernel. Results obtained evidence that regional relative prices in Russia remained fairly stable during 2001-2010. No significant changes are found in price dispersion and cross-region price distribution over this time span. Rank mobility was very low with seasonal surges. The pattern of quantity mobility manifests neither convergence nor divergence of regional prices. However, a long-run price distribution has an unpleasant feature, predicting potential emergence of a price convergence club in the Russian Far East. Given that potentialities for price convergence among Russian regions existed by 2001, the pattern obtained can be termed stagnation rather than stability. [ABSTRACT FROM AUTHOR]

We examine the record of cross-country growth over the past fifty years and ask if developing countries have made progress on closing the income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they have not and then survey the literature on absolute convergence with particular emphasis on that from the last decade or so. That literature supports our conclusion of a lack of progress in closing the income gap between countries. We close with a brief examination of the recent literature on cross-individual distribution of income, which finds that despite the lack of progress on cross country convergence, global inequality has tended to fall since 2000. (JEL E01, E13, O11, O47, F41, F62) [ABSTRACT FROM AUTHOR]

Abstract: In this paper, I examine convergence in income inequality and economic growth under two governmental regimes on human capital where the first one has only education subsidy and the second one has education subsidy and research & development investment. This study using endogenous growth framework with human capital and technological progress hypothesized that, under education and research & development investment, human capital and technological progress can produce a higher global effect to the country in the long run. This will result in the convergence in income where poor dynasty/regions grow faster than rich dynasty/regions in the long run. From model simulation, I found that, in the poor economy, when adding a research & development investment in addition to education subsidy, convergence in income and long-run economic growth perform better than another scenario which has only education subsidy. Empirically, this pattern has been validated on Thailand''s provincial level where conditional convergence of growth rate per capita among these provinces tends to converge faster between the periods of 2000 – 2009. [Copyright &y& Elsevier]

This paper analyzes the effects of the enlargements of the European Union on inequality using an approach based on individuals' lifecycle incomes. This allows one to consider the effect of different rates of growth and survival rates. Inequality in terms of permanent income was substantially less than in current per capita income at the time of all the enlargements except those of the last 10 years. The results point to the key role of policies that stimulate growth in the less developed countries. With an annual β-convergence of 2% in current income, inequality in permanent income would be less than one third of what it is now. [ABSTRACT FROM AUTHOR]

The article discusses the ecnomic analysis of inequality in East Asia. It is suggested that literatures on the topic are rapidly increasing due to the renewed interest in growth theory and empirics since the 1980s, availability of data, the significant increase of quantitative techniques, simultaneous with the development of the IT software required for the application of the new methodologies.

This paper analyses the evolution of regional inequality in Brazil in the period 1939-1995. Based on a data set organized by the author, indicators of per capita income dispersion among states and regions are presented and their evolution over time is analyzed. The correlation between the regional initial level of per capita income and its growth is considered, testing for Beta convergence. The speed of convergence is calculated in two different forms, the neoclassical model and the coefficient of variation, the later allowing for the analysis of oscillations in inequality over time and its relationship to national economic growth rates. The Kuznetz hypothesis, relating regional income inequality and level of development, is tested. The results indicate the presence of signs of regional income convergence in Brazil, but with important oscillations in the evolution of inequality over time as well as across regions within the country. The association of regional inequality with national income growth produced interesting results, indicating a promising line for future research. [ABSTRACT FROM AUTHOR]

While Indonesia has been experiencing relatively considerable and stable economic growth in the last decades, the country is prone to income disparity across regions due to uneven distribution of population, natural resources and the persistent impacts of centralized development imposed by the New Order regime. This study examines the economic growth convergence in East Java, Indonesia, from 2010 to 2019 and explores the influence of government expenditure on education, health, and capital sector on the economic growth convergence. By considering spatial dependence across regions, the result shows no strong evidence of regional income convergence in East Java. Also, this research claims the presence of spillover effect of government expenditure on education and capital sector on regional income growth. Notably, higher government expenditure of the education sector in one region could stimulate higher economic growth of its neighboring regions. Conversely, higher government expenditure on the capital sector in one region may lower the economic growth of its surrounding regions. [ABSTRACT FROM AUTHOR]

This article examines the relationship between legislative malapportionment, redistribution, and regional economic development. One of the primary justifications for legislative malapportionment—the disparity between the share of legislative seats and the share of the national population—is interregional income equalization by means of favorable allocations of resources to rural areas through overrepresentation. By analyzing the case of Brazil using instrumental variables, this study evaluates the theoretical argument and the empirical validity of the presumed mechanism linking unequal representation to regional development and national economic convergence. It argues that in contexts of undeveloped democracies, rather than convergence, disproportionate resource transfers via overrepresentation hinder the development of beneficiary regions. The empirical analyses of Brazilian states indicate that while overrepresented jurisdictions do receive disproportionate shares of resources from the federal government, disproportionate resource transfers, and dependence on resource transfers attributable to overrepresentation hamper the development potential of those regions. [ABSTRACT FROM AUTHOR]

The article highlights the limitations of claims of convergence between the global North and South in relation to income from 1990-2015. Topics covered include the growing inequality within many countries, the argument that international development goes beyond empirical data to underlying causal processes of globalized capitalism and climate change, and a discussion about 21st century global development.

Despite the fall in global income inequality in the last two decades, levels of living among individuals in the world are still very different and are likely to remain so for a very long time. The uneven rate of decline in inequality and growth volatility in commodity‐dependent countries suggest that there is no reason to believe that global inequality will continue to fall until it reaches acceptably low levels. Global disparities in incomes and welfare, especially in social protection, are at the heart of the problem of migration and populism in Western democracies in recent years. They bring out in bold relief the lack of fit between claims of global convergence and people's perceptions on incomes and well‐being between the global North and South. In this regard, it is more realistic to talk about 'multiple geographies of 21st century development' than a 'one world' or single geography of global development. Issues of power, and the way global and national relationships and rules allocate advantages and disadvantages, or promote convergence and divergence, between and within countries, need to be front and centre in the discussion on global convergence. [ABSTRACT FROM AUTHOR]

Despite economic growth in the post-World War II period, few developing countries have been able to catch up to the income levels in the United States or other advanced economies. Such countries remain trapped at a relative low- or middle-income level. In this article, the authors redefine the concept of income traps as situations in which income levels relative to the United States remain constantly low and with no clear sign of convergence. This approach allows them to study the issue of economic convergence (or lack of it) directly. The authors describe evidence pointing to the existence of both relative low- and middle-income traps and examine cross-country historical transitions between income groups at the global and regional levels. Finally, they point out challenges to the benchmark neoclassical growth theory, which predicts convergence to the developed world over time, and discuss existing theories with the potential to explain income traps. [ABSTRACT FROM AUTHOR]