The Morphology of Income Convergence in US States: New Evidence using an Error-Correction-Model

Alexiadis, Stilianos and Eleftheriou, Konstantinos (2010): The Morphology of Income Convergence in US States: New Evidence using an Error-Correction-Model.

Abstract

This paper reconsiders the question of regional convergence across the US States over the long-run. The analysis is carried out over the period 1929-2005. Our analysis advocates and implements an Error-Correction-Model (ECM) approach to deal with this issue. The aforementioned model is applied in order to assess the possibilities of intraregional convergence towards steady-state equilibrium, approximated in terms of the State with highest per-capita income in each broad region. Empirical analysis suggests a pattern of convergence in accordance with the ECM supporting its validity. Further inspection of the results provides an indirect indication of the agglomerative effects in shaping the patterns of convergence.

• Item Type: MPRA Paper
• Language: English
• Keywords: Income Convergence; Error-Correction-Model; US States
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R10 - General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes

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