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Testing differences in long run growth among Spanish regions: Can growth models explain it?

  • Julio Herrera Revuelta

    ()

  • Jesus Santamaria Fidalgo

    ()

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    During the last decade we have assisted to a renewal interest in growth. There were a great number of theoretical and empirical works since the question was reopen by the Romer (1986) article about long run properties of growth models. Growth models can be classified in two kinds: exogenous growth models and endogenous growth models. The main differences between them are that the endogenous models try to incorporate into the behavior of the agents the assumptions that the first assumes as exogenous. This difference, that sounds only methodological, has important implications. The conclusion of the exogenous models is that, in presence of free factor mobility and free diffusion of technology, countries and regions will converge to the same rate of growth, and, in absence of technical progress, they will converge to the same level of per capita income, without any influence of initial conditions or political intervention in the economy (This result is obtained by Barro(1991) and Barro y Sala(1992)). With endogenous models the economies will growth at a rate determined by the behavior of the agents in the economy and could be the same or different among different economies. The theoretical result of these models is that in the long run could exist convergence or divergence. The main focus of this paper is, using the data for Spanish Regions from 1955 to 1991 and applying unit root time series methodology, to determine long run growth rates for each region with the aim of knowing if we can choose between the two kind of growth models.

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    File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa98/papers/11.pdf
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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa98p11.

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    Date of creation: Aug 1998
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    Handle: RePEc:wiw:wiwrsa:ersa98p11
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    1. William Easterly & Sergio Rebelo, 1993. "Fiscal Policy and Economic Growth: An Empirical Investigation," NBER Working Papers 4499, National Bureau of Economic Research, Inc.
    2. Angel de la Fuente & Vicente Salas Fumás, . "On the sources of convergence: A close look at the Spanish regions," Studies on the Spanish Economy 01, FEDEA.
    3. Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
    4. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
    5. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
    6. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1993. "Disparidades Regionales Y Convergencia En Las Cc.Aa. Españolas," Working Papers. Serie EC 1993-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    7. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    8. Ben-David, Dan & Papell, David, 1994. "The Great Wars, the Great Crash, and the Unit Root Hypothesis: Some New Evidence About An Old Stylized Fact," CEPR Discussion Papers 965, C.E.P.R. Discussion Papers.
    9. Canova, Fabio & Marcet, Albert, 1995. "The Poor Stay Poor: Non-Convergence Across Countries and Regions," CEPR Discussion Papers 1265, C.E.P.R. Discussion Papers.
    10. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-93, September.
    11. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    12. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
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