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Regional disparities in the spatial correlation of state income growth

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  • Thomas A. Garrett
  • Gary A. Wagner
  • David C. Wheelock

Abstract

This paper presents new evidence of spatial correlation in U.S. state income growth. We extend the basic spatial econometric model used in the growth literature by allowing spatial correlation in state income growth to vary across geographic regions. We find positive spatial correlation in income growth rates across neighboring states, but that the strength of this spatial correlation varies considerably by region. Spatial correlation in income growth is highest for states located in the Northeast and the South. Our findings have policy implications both at the state and national level, and also suggest that growth models may benefit from incorporating more complex forms of spatial correlation.

Suggested Citation

  • Thomas A. Garrett & Gary A. Wagner & David C. Wheelock, 2005. "Regional disparities in the spatial correlation of state income growth," Working Papers 2005-061, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2005-061
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    References listed on IDEAS

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    Keywords

    Regional economics ; Income distribution;

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