## Abstract

This paper adopts a spatial econometric perspective to analyse regional convergence of per

capita income in Europe in 1995 to 2000 and, moreover, relaxes the assumption of a single

steady-state growth path which appears to be out of tune with reality of empirical dynamics.

The two-club spatial error convergence model with groupwise heteroskedasticity is found to

be most appropriate for the data at hand. Two empirical key findings are worthwhile to note.

The first is that the data provide much support for unconditional ß-convergence in Europe.

The second is that the usual convergence conclusions hold. But they do so for reasons that are

not revealed by the classical test equation that is typical in mainstream economics literature.

capita income in Europe in 1995 to 2000 and, moreover, relaxes the assumption of a single

steady-state growth path which appears to be out of tune with reality of empirical dynamics.

The two-club spatial error convergence model with groupwise heteroskedasticity is found to

be most appropriate for the data at hand. Two empirical key findings are worthwhile to note.

The first is that the data provide much support for unconditional ß-convergence in Europe.

The second is that the usual convergence conclusions hold. But they do so for reasons that are

not revealed by the classical test equation that is typical in mainstream economics literature.

Originalsprache | Englisch |
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Erscheinungsort | Vienna |

Herausgeber | WU Vienna University of Economics and Business |

Publikationsstatus | Veröffentlicht - 1 Juni 2004 |