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Economic convergence or divergence? Modeling the interregional dynamics of EU regions, 1985–1999

Author

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  • Giuseppe Arbia
  • Jean H. P. Paelinck
Abstract
In this paper we start from a continuous time framework derived from the classical predator-prey model in order to analyze the recent dynamics of regional evolution in the EU. The model describes a system of interrelated units obeying a complex functional dynamics that at any moment may encompass divergent forces. After briefly reviewing the modeling framework presented elsewhere (Arbia and Paelinck 2002), we consider the dynamics of per-capita income in 119 NUTS-2 European regions in the years 1985–1999, and fit the model using Simultaneous Dynamic Least Squares (Paelinck 1996b). The model is shown to fit the empirical data well. The – potential divergence – leads up to a formidable coordination task for public authorities responsible for regional policies, as they are supposed – if their aim is absolute convergence in an economic sense, meaning equalizing incomes per head – to produce at any time a consistent set of regional policies for all the regions concerned, and not only for the less developed ones. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • Giuseppe Arbia & Jean H. P. Paelinck, 2003. "Economic convergence or divergence? Modeling the interregional dynamics of EU regions, 1985–1999," Journal of Geographical Systems, Springer, vol. 5(3), pages 291-314, November.
    • Handle: RePEc:kap:jgeosy:v:5:y:2003:i:3:p:291-314
    DOI: 10.1007/s10109-003-0114-z
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    Cited by:

    1. Márcio Poletti Laurini, 2017. "A spatial error model with continuous random effects and an application to growth convergence," Journal of Geographical Systems, Springer, vol. 19(4), pages 371-398, October.
    2. Ron Martin & Peter Sunley, 2015. "On the notion of regional economic resilience: conceptualization and explanation," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 1-42.
    3. Marusca De Castris & Guido Pellegrini, 2015. "Agglomeration Effects On Regional Unemployment In Europe," Working Papers 0715, CREI Università degli Studi Roma Tre, revised 2015.
    4. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2007. "Regional Convergence in Germany: a Geographically Weighted Regression Approach," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 45-64.
    5. Esteban Fernández-Vázquez & Blanca Moreno, 2017. "Entropy Econometrics for combining regional economic forecasts: A Data-Weighted Prior Estimator," Journal of Geographical Systems, Springer, vol. 19(4), pages 349-370, October.
    6. Çınar Tuğrul, 2017. "Spatial Dimensions of Sectoral Labor Productivity Convergence in Turkey: A Spatial Panel Data Approach," Review of Middle East Economics and Finance, De Gruyter, vol. 13(1), pages 1-14, April.
    7. Luca Salvati & Marco Zitti, 2017. "Urban Concentration, Agglomeration Economies and the Spatial Structure of Italian Local Labor Market Areas," Research in Applied Economics, Macrothink Institute, vol. 9(2), pages 1-17, June.
    8. Mauro Costantini & Giuseppe Arbia, 2006. "Testing the stochastic convergence of Italian regions using panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 775-783.
    9. Eckey Hans-Friedrich & Kosfeld Reinhold & Türck Matthias, 2005. "Intra- und internationale Spillover-Effekte zwischen den EU-Regionen / Intra- and International Spillovers Across EU Regions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(6), pages 600-621, December.
    10. Rokicki, Bartlomiej & Hewings, Geoffrey J.D., 2016. "Regional convergence within particular country — An approach based on the regional price deflators," Economic Modelling, Elsevier, vol. 57(C), pages 171-179.
    11. Adriana Kocornik‐Mina, 2009. "Spatial econometrics of multiregional growth: The case of India," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 279-300, June.
    12. Mounir Amdaoud & Giuseppe Arcuri & Nadine Levratto & Marianna Succurro & Damiana Costanzo, 2020. "Geography of COVID-19 outbreak and first policy answers in European regions and cities [Géographie de la Covid-19 et réponses politique des régions et villes européennes]," Working Papers halshs-03046489, HAL.
    13. Julián Ramajo & José Manuel Cordero & Miguel Ángel Márquez, 2017. "European regional efficiency and geographical externalities: a spatial nonparametric frontier analysis," Journal of Geographical Systems, Springer, vol. 19(4), pages 319-348, October.
    14. Eckey, Hans-Friedrich & Türck, Matthias, 2005. "Convergence of EU-regions: A literature report," Volkswirtschaftliche Diskussionsbeiträge 80, University of Kassel, Faculty of Economics and Management.
    15. Antonio Páez, 2009. "Spatial analysis of economic systems and land use change," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 251-258, June.
    16. Paelinck, Jean H.P., 2007. "RUE -- or joyful for operational methods?," Regional Science and Urban Economics, Elsevier, vol. 37(4), pages 517-520, July.
    17. Bartlomiej Rokicki & Geoffrey J.D. Hewings, 2017. "The impact of the regional price deflators on regional income convergence in Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 48(6), pages 531-556.
    18. Luca Salvati & Alberto Sabbi, 2014. "A New Income Indicator for the Assessment of Regional Competitiveness and Sustainability," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(2), pages 711-711.

    More about this item

    Keywords

    continuous time; differential equation; regional convergence; prey-predator model; spatial dependence; spatial modeling; C13; O00; R11;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • O00 - Economic Development, Innovation, Technological Change, and Growth - - General - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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