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


  • Julio Herrera Revuelta


  • Jesus Santamaria Fidalgo



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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  • Julio Herrera Revuelta & Jesus Santamaria Fidalgo, 1998. "Testing differences in long run growth among Spanish regions: Can growth models explain it?," ERSA conference papers ersa98p11, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa98p11

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    References listed on IDEAS

    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. 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.
    3. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    4. de la Fuente, Angel, 2002. "On the sources of convergence: A close look at the Spanish regions," European Economic Review, Elsevier, vol. 46(3), pages 569-599, March.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    6. 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.
    7. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    8. 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.
    9. 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).
    10. 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.
    11. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-1393, September.
    12. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
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