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A distribution dynamics approach to regional income convergence in reunified Germany

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Falko Juessen ()

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Abstract

In this paper, we present an empirical study of per capita income convergence across German labour market regions during 1992 to 2002 using nonparametric techniques. We find clear evidence for convergence during the period we study, i.e. that regions that were poor in 1992 have increased their relative incomes in 2002. A special feature of our approach is that it allows to make predictions about the long-run distribution of regional incomes. We predict a persistent inequality among German regions. This result is especially important with respect to the massive regional policy expenditures taken in the last decade. According to our analysis it is unlikely that German policy will prevent polarization in the regional income distribution even if transers and subsidies will be continued in a comparable magnitude. Consequently, we argue that regional policy programs in Germany do not achieve their aim, and therefore need to be reviewed.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p411.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p411

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  6. Johnson, Paul A., 2000. "A nonparametric analysis of income convergence across the US states," Economics Letters, Elsevier, vol. 69(2), pages 219-223, November. [Downloadable!] (restricted)
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  15. Jones, Charles I, 1997. " Convergence Revisited," Journal of Economic Growth, Springer, vol. 2(2), pages 131-53, July. [Downloadable!] (restricted)
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  20. Andrade, Eduardo & Laurini, Marcio & Madalozzo, Regina & Valls Pereira, Pedro L., 2004. "Convergence clubs among Brazilian municipalities," Economics Letters, Elsevier, vol. 83(2), pages 179-184, May. [Downloadable!] (restricted)
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  21. Funke, M. & Strulik, H., 1999. "Growth and Convergence in a Two-Region Model of Unified Germany," Electronic-Only (EO) Working Papers 9905, Faculty of Economics, University of Cambridge. [Downloadable!]
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  22. Niebuhr, Annekatrin, 2001. "Convergence and the Effects of Spatial Interaction," Discussion Paper Series 26351, Hamburg Institute of International Economics. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Amador, João & Cabral, Sónia & Ramos Maria, José, 2007. "International Trade Patterns over the Last Four Decades: How does Portugal Compare with other Cohesion Countries?," MPRA Paper 5996, University Library of Munich, Germany. [Downloadable!]
  2. Amador, João & Cabral, Sonia & Ramos Maria, Jose, 2007. "Relative Export Structures and Vertical Specialization: A Simple Cross-Country Index," MPRA Paper 6208, University Library of Munich, Germany. [Downloadable!]
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