Regional Income Convergence in the Enlarged Europe, 1995-2000: A Spatial Econometric Perspective

Manfred M. Fischer, Claudia Stirböck

    Publication: Working/Discussion Paper

    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.
    Original languageEnglish
    Place of PublicationVienna
    PublisherWU Vienna University of Economics and Business
    Publication statusPublished - 1 Jun 2004

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