Converging Wages, Diverging GRP: Directed Technical Change and Endogenous Growth. Empirical Analysis of Growth Patterns across Kazakh regions
AbstractThe paper analyzes unequal regional development in Kazakhstan. Applying the nonlinear least squares method in presence of spatial correlation we estimate the convergence rate of wages across Kazakh regions for the period 2003–2009. The estimated convergence rate is about 3% which is somewhat higher than estimates obtained for the USA and Europe. At the same time there is slight divergence in the GRP per capita. It is argued that convergence in wages which coincides with divergence in the per capita GRP is consistent with the endogenous growth model where profit maximizing firms choose the capital intensity of the technology. This implies that the inequality between regions will only exacerbate and the central government may wish to invest more in low-growth regions to alleviate disproportional development.
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Bibliographic InfoPaper provided by Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) in its series Working Papers with number 307.
Date of creation: Dec 2011
Date of revision:
Find related papers by JEL classification:
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
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