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Geography, Cost-Of-Living, And Determinants To Economic Growth: A Study Of The Swedish Regions, 1911-1993

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  • Gustavsson, Patrik

    () (European Institute of Japanese Studies)

  • Persson, Joakim

    (European Institute of Japanese Studies)

Abstract

This paper analyses determinants to economic growth with a spatial perspective using data on the Swedish counties for the period 1911-1993. We find that the county growth rate of income per capita is strongly related to the growth rate of income per capita in contiguous counties regardless of what explanatory variables are included in the regressions. We also find empirical evidence of geographical spillovers through the income per capita and market size in contiguous counties. In addition, we find that population density and population age structure impact the growth rate of income per capita only when incomes are not adjusted for regional differences in cost-of-living. When correctly adjusting for such differences, which rarely occur in the growth literature that uses regional data, the growth effects of these variables disappear. The regressions also show that the estimated growth effect of net in-migration is negative and statistically significant.

Suggested Citation

  • Gustavsson, Patrik & Persson, Joakim, 2003. "Geography, Cost-Of-Living, And Determinants To Economic Growth: A Study Of The Swedish Regions, 1911-1993," EIJS Working Paper Series 186, Stockholm School of Economics, The European Institute of Japanese Studies.
  • Handle: RePEc:hhs:eijswp:0186
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    More about this item

    Keywords

    Spatial econometrics; Spillovers; Economic Growth; PPP-adjustment; Agglomeration; Population Age Structure; Migration;

    JEL classification:

    • C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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