European Regional Convergence in a Human Capital Augmented Solow Model

Hans-Friedrich Eckey, Christian Dreger and Matthias Türck

No 631, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In this paper, the process of productivity convergence is investigated for the enlarged European Union using regional (NUTS-2) data. The Solow model extended by human capital is employed as a workhorse. Alternative strategies are proposed to control for spatial effects. All specifications confirm the presence of convergence with an annual speed between 3 and 3.5 percent towards regional steady states. Furthermore, a geographically weighted regression approach indicates a wide variation in the speed of convergence across the regions, where a higher speed is striking in particular in France and the UK. Clusters of convergence can be identified, where regions with high convergence also have high initial income levels.

Keywords: Solow model; regional convergence; spatial lags; spatial filtering (search for similar items in EconPapers)
JEL-codes: C21 O47 R11 R15 (search for similar items in EconPapers)
Pages: 24 p.
Date: 2006
New Economics Papers: this item is included in nep-edu, nep-eec, nep-eff, nep-geo and nep-hrm
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Citations: View citations in EconPapers (5)

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Working Paper: European regional convergence in a human capital augmented Solow model (2006)
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