Structural Reforms and Regional Convergence

Author/Editor:

Antonio Spilimbergo ; Natasha X Che

Publication Date:

April 1, 2012

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Which structural reforms affect the speed the regional convergence within a country? We found that domestic financial development, trade/current account openness, better institutional infrastructure, and selected labor market reforms facilitate regional convergence. However, these reforms have mixed effects on the growth of regions closer to the country’s development frontier. We also document that regional income disparity and average income are inversely correlated across countries so that speeding up regional convergence increases national income. We also present a theoretical model to discuss these results.

Series:

Working Paper No. 12/106

Subject:

English

Publication Date:

April 1, 2012

ISBN/ISSN:

9781475503272/1018-5941

Stock No:

WPIEA2012106

Format:

Paper

Pages:

34

Please address any questions about this title to publications@imf.org