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Dynamic spatial modelling of regional convergence processes

  • Reinhold KosfeldEmail author
  • Jorgen Lauridsen
Part of the Studies in Empirical Economics book series (STUDEMP)

Econometric analysis of convergence processes across countries or regions usually refers to a transition period between an arbitrary chosen starting year and a fictitious steady state. Panel unit root tests and panel cointegration techniques have proved to belong to powerful econometric tools if the conditions are met. When referring to economically defined re gions, though, it is rather an exception than the rule that coherent time series are available. For this case we introduce a dynamic spatial modelling ap proach which is suitable to trace regional adjustment processes in space in stead of time. It is shown how the spatial error-correction mechanism (SEC model) can be estimated depending on the spatial stationarity properties of the variables under investigation. The dynamic spatial modelling approach presented in this paper is applied to the issue of conditional income and productivity convergence across labour market regions in unified Germany.

Keywords

Regional convergence dynamic spatial models spatial unit roots spatial error-correction 

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Copyright information

© Physica-Verlag Heidelberg 2009

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of KasselKasselGermany
  2. 2.Department of EconomicsUniversity of Southern DenmarkOdense MDenmark

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