Regional Convergence – And Divergence – In the US

Abstract

Previous studies on regional convergence in the US have employed varied methodologies and yielded different conclusions. Some authors report evidence that convergence has grown stronger in recent decades, while others find recent years have seen an end to convergence. We test for convergence with a method that allows for structural change. We find, first, that there is little overall evidence for convergence within the US. Results also indicate a series of positive breaks in the 1980s, indicating movement away from convergence was pronounced during this decade. Diverging housing costs may have played a role in limiting convergence.

Keywords: Economic Convergence, General Regional Economics

JEL Classification: O5, R1