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Aggregate economic fluctuations and regional convergence: the Finnish case 1988-95


  • Sari Pekkala


This paper analyses the connection between aggregate economic fluctuations and regional productivity convergence in Finland during the period 1988-95. Markov chain transition matrices and mobility indices were used to examine the regional distribution of productivity. The results indicated that high intra-distribution mobility occurred during booms, when regional convergence potential was also at its highest. Conversely, recession years were characterized by much lower mobility and a more divergent regional pattern. These findings bear important implications in terms of regional policy planning, as it seems that poor regions do not manage to keep up with the rich ones during slumps, whereas regional disparities diminish naturally during boom years.

Suggested Citation

  • Sari Pekkala, 2000. "Aggregate economic fluctuations and regional convergence: the Finnish case 1988-95," Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 211-219.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:2:p:211-219
    DOI: 10.1080/000368400322895

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    References listed on IDEAS

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    Cited by:

    1. Kangasharju, Aki & Pekkala, Sari, 2001. "Regional Economic Repercussions of an Economic Crisis: A Sectoral Analysis," Discussion Papers 248, VATT Institute for Economic Research.
    2. Hasan Engin Duran, 2011. "Short run dynamics of income disparities and regional cycle synchronization," ERSA conference papers ersa11p937, European Regional Science Association.
    3. W.A. NaudÈ & W.F. Krugell, 2003. "An Inquiry into Cities and their Role in Subnational Economic Growth in South Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(4), pages 476-499, December.
    4. S. Dobson & C. Ramlogan, 2002. "Economic Growth and Convergence in Latin America," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 83-104.
    5. Andres Rodríguez-Pose & Ugo Fratesi, 2003. "Regional economic cycles and the emergence of sheltered economies in the periphery of the EU," ERSA conference papers ersa03p189, European Regional Science Association.
    6. Andrea Elekes, 2011. "Cohesion and/or Growth?," Public Finance Quarterly, State Audit Office of Hungary, vol. 56(1), pages 108-124.
    7. Nicola D. Coniglio & Francesco Prota, 2011. "Economic Crises and Regional Convergence in the EU: An Exploration of Facts, Theories and Policy Implications," Chapters,in: The Economic Crisis and European Integration, chapter 5 Edward Elgar Publishing.
    8. Stephen Dobson & Carlyn Ramlogan, 2002. "Convergence and divergence in Latin America, 1970-1998," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 465-470.
    9. Sergio J. Rey & Mark V. Janikas, 2005. "Regional convergence, inequality, and space," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 155-176, April.
    10. Hasan Engin Duran, 2014. "Short-Run Dynamics of Income Disparities and Regional Cycle Synchronization in the U.S," Growth and Change, Wiley Blackwell, vol. 45(2), pages 292-332, June.
    11. Stefano Magrini & Margherita Gerolimetto & Hasan Engin Duran, 2011. "Distortions in Cross-Sectional Convergence Analysis when the Aggregate Business Cycle is Incomplete," Working Papers 2011_07, Department of Economics, University of Venice "Ca' Foscari".

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