European Regional Science Association
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European Regional Science Association
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The abstract for paper number 438:
Sandy Dall'erba, University of Pau (France), Champaign, USA, Kieran P. Donaghy, Regional Economics Applications Laboratory at the University of Illinois at Urbana-Champaign, Urbana-Champaign, USA, Geoffrey Hewings, Prof., Urbana, Illinois, USA, Marco Percoco, Department of Economics
Bocconi University, Milan, Italy
Convergence in Europe and in USA: Assessing the Impact of Structural Economic Differences
In recent years, regional scientists and macroeconomists have largely discussed on the empirics of economic convergence of European and US regions. Despite a good empirical evidence of a convergent path among American States, the convergence rate among European regions appears to be quite slow. Some scholars have also found increasing regional inequalities in EU, implying a divergence pattern.
The aim of this paper is to underline the importance of structural differences between USA and Europe in terms of industrial mix by assuming that this difference is capable to explain the different paths of convergence. In particular, by using the theory of Importance Matrix in probabilistic Input-Output models firstly proposed by Percoco (2002) and subsequently improved by Percoco and Dridi (2002) we assess the relative importance of the sectors for the economies. In particular, we propose a statistical model capable to compute a sensitivity index associated to each technical coefficient. We call the ordered set of this indices Importance Matrix. This new concept provides a quantitative measure of the relative importance for the economies of each element and then of each sector. We finally use these results to explain the different patterns of convergence in Europe and in USA by assuming that they are functions of the industrial mix of the states.
References Percoco, M. (2002), Parametric Uncertainty in Input-Output Models, University of Illinois at Urbana-Champaign, REAL, mimeo Percoco, M. and C. Dridi (2002), Confidence Intervals Constructions for I-O Tables Technical Coefficients Through Importance Matrix, University of Illinois at Urbana-Champaign, REAL, mimeo
Unfortunately full paper has not been submitted.