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Structural Reforms and Regional Convergence
Author:
Mr. Antonio Spilimbergo
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Ms. Natasha X Che
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Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 106
Language:
English
Publication Date:
01 Apr 2012
DOI:
https://doi.org/10.5089/9781475503272.001
ISBN:
9781475503272
ISSN:
1018-5941
Pages:
34
Keywords:
WP; Structural reforms; regional convergence; economic growth; income inequality; frontier region; cross-region mobility; region j; growth rate; development frontier; EU sample; Euro area debt crisis; development level; GDP variable; part of the country; country frontier; capital intensity level; Labor taxes; Minimum wages; Productivity; Tax wedge; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Which structural reforms affect the speed the regional convergence within a country? We found that domestic financial development, trade/current account openness, better institutional infrastructure, and selected labor market reforms facilitate regional convergence. However, these reforms have mixed effects on the growth of regions closer to the country’s development frontier. We also document that regional income disparity and average income are inversely correlated across countries so that speeding up regional convergence increases national income. We also present a theoretical model to discuss these results.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund