Discussion Paper Details

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Title: Structural Reforms and Regional Convergence

Author(s): Natasha Xingyuan Che and Antonio Spilimbergo

Publication Date: April 2012

Keyword(s): economic growth, income inequality, regional convergence and structural reforms

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

Abstract: 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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Bibliographic Reference

Che, N and Spilimbergo, A. 2012. 'Structural Reforms and Regional Convergence'. London, Centre for Economic Policy Research.