Academic journal article Atlantic Economic Journal

Have Regions in the U.S. Converged or Diverged?

Academic journal article Atlantic Economic Journal

Have Regions in the U.S. Converged or Diverged?

Article excerpt

The subject of regional convergence or divergence has been studied extensively by Kuznets [AER, 1955], Williamson [EDCC, 1965], Alonso [RSAP, 1980], Amos [RSUE, 1988; RRS, 1989; SEJ, 1989; RRS, 1990], Barro [JPE, 1992], among others. Major theories explaining convergence or divergence include the neoclassical, export base, cumulative causation, growth pole, long wave, and other hypotheses. Their different findings may be attributed to the model specifications and time periods covered. In this study, the sample developed by Williamson and Amos [RRS, 1989] is extended from 1929-85 to 1929-92. In order to test if U.S. regions have converged or diverged, the following model with a quadratic term and incorporating the partial adjustment process is specified:

[Mathematical Expression Omitted]

where INEQ, GDPPC, u, and t denote a regional inequality index developed by Williamson [EDCC, 1965], real GDP per capita as a proxy for economic growth, the error term, and year. Data for 1929-85 were taken from Amos [RRS, 1989], and data between 1986-92 were obtained from the Survey of Current Business and calculated by the author. To avoid very small or large coefficients, [INEQ.sub.t] is multiplied by 100, and [GDPPC.sub.t] is expressed in thousands. An analysis of the data indicates that regional inequality indexes declined from 36. …

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