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Structural Reforms and Regional Convergence

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  • Antonio Spilimbergo
  • Natasha Xingyuan Che

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.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 12/106.

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Length: 34
Date of creation: 01 Apr 2012
Date of revision:
Handle: RePEc:imf:imfwpa:12/106

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Keywords: Economic growth; Economic models; Fiscal reforms; Labor market policy; Labor market reforms; equation; wage; minimum wage; severance payment; statistics; correlation; standard errors; statistical significance; samples; probability; benefits; empirical model; wages; minimum wages; dynamic models; heteroscedasticity; severance payments; unemployment insurance; wage level; significance levels; equations; diffusion processes; sample size; estimation of equation; significance level; wage rate;

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Cited by:
  1. Peter Huber, 2013. "Labour Market Institutions and Regional Unemployment Disparities," WWWforEurope Working Papers series 29, WWWforEurope.
  2. Nicola Gennaioli & Rafael La Porta & Florencio Lopez de Silanes & Andrei Shleifer, 2013. "Growth in Regions," NBER Working Papers 18937, National Bureau of Economic Research, Inc.
    • Nicola Gennaioli & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "Growth in Regions," Working Paper 73436, Harvard University OpenScholar.

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