Regional growth and convergence empirics

Abstract

This chapter provides a selective survey of the main developments related to the study of regional convergence.We discuss the methodological issues at stake and show how a number of techniques applied in cross-country studies have been adapted to the study of regional convergence. In doing this, we focus on the two main strands of growth econometrics: the regression approach where predictions from formal neoclassical and other growth theories have been tested using cross-sectional and panel data and the distribution approach, which typically examines the entire distribution of output per capita across regions. In each case, we show how the analysis of regions rather than countries emphasizes the need to take proper account of spatial interaction effects.