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Regional Inequality and Convergence in Europe, 1995-2005

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  • Arne Melchior

Abstract

The paper presents new results on within-country regional inequality in per capita income for 36 countries during 1995-2005; focusing on Europe but with some non-European countries included for comparison. In 23 of the 36 countries there was a significant increase in regional inequality during the period, and in only three cases there was a reduction. Regional inequality increased in all countries of Central and Eastern Europe, while for most Western European countries there was little change. For the EU-27 as a whole, there was a modest increase in within-country regional inequality, but convergence across countries. The latter effect was quantitatively more important, so on the whole there was income convergence in the EU-27, especially after 2000. Regional inequality is particularly important for some large middle-income countries such as China, Russia and Mexico. In such countries there may however be considerable price differences across regions, and the use of common price deflators for the whole country may lead to a biased assessment of regional inequality.

Suggested Citation

  • Arne Melchior, 2008. "Regional Inequality and Convergence in Europe, 1995-2005," CASE Network Studies and Analyses 0374, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnstan:0374
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    File URL: http://www.case-research.eu/upload/publikacja_plik/22884265_sa374.pdf
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    References listed on IDEAS

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    1. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution,in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier.
    2. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    3. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909 Elsevier.
    4. Aadne Cappelen & Jan Fagerberg & Bart Verspagen, 1999. "Lack of regional convergence," Working Papers Archives 1999001, Centre for Technology, Innovation and Culture, University of Oslo.
    5. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    6. Gluschenko, Konstantin, 2006. "Biases in cross-spave comparisons through cross-time price indexes : the case of Russia," BOFIT Discussion Papers 9/2006, Bank of Finland, Institute for Economies in Transition.
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    More about this item

    Keywords

    Income distribution; regional inequality; economic growth and convergence; European integration;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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