Structural Reforms and Regional Convergence

39 Pages Posted: 25 May 2012

See all articles by Natasha Xingyuan Che

Natasha Xingyuan Che

International Monetary Fund (IMF)

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

Multiple version iconThere are 2 versions of this paper

Date Written: April 2012

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.

Keywords: economic growth, income inequality, regional convergence, structural reforms

JEL Classification: J68, O11, O18, O25, O33

Suggested Citation

Che, Natasha Xingyuan and Spilimbergo, Antonio, Structural Reforms and Regional Convergence (April 2012). CEPR Discussion Paper No. DP8951. Available at SSRN: https://ssrn.com/abstract=2066324

Natasha Xingyuan Che (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6346 (Phone)
202-623-6336 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute ( email )

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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