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Regional Disparities in the European Union : Convergence and Agglomeration

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Author Info
Kurt Geppert
Michael Happich
Andreas Stephan

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Abstract

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 525.

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Length: 30 p.
Date of creation: 2005
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Handle: RePEc:diw:diwwpp:dp525

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Related research
Keywords: Regional growth Agglomeration Markov chains

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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